Editorials
Seoul jeonse prices top 700 million won
Apartment lump sum deposit prices in the city hit a record high as rental listings shrink and tax policies raise concerns over a worsening housing squeeze for tenants.
Prime Minister Han Seong-sook delivers opening remarks at a public forum on real estate policy at the Korea Chamber of Commerce and Industry in Jung District, Seoul, on July 27.
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The average jeonse price for apartments in Seoul has surpassed 700 million won for the first time, or about $475,900 at the current exchange rate of 1,471 won to the dollar. Jeonse is Korea's unique lease system in which tenants pay a large refundable deposit instead of monthly rent. The figure has climbed above the previous peak reached in 2021, when the supply of jeonse homes shrank after contract renewal rights and rent increase caps were introduced. Following a period of relative stability in 2023 and 2024, the rental market has become unsettled again as financial and tax regulations have tightened.
The shortage of rental listings is becoming acute. A 3,658-unit apartment complex in Seoul's Gangdong District recently had only 29 jeonse or monthly rental units on the market. In February, President Lee Jae Myung said that if owners of multiple homes or registered landlords sold their properties, both housing prices and rents would stabilize as more homes became available. At a news conference marking his first year in office, he described the decline in jeonse listings as part of a "normalization process." Many tenants, however, continue to face growing housing insecurity.
More than half of Seoul households, 53.4 percent, live in jeonse or monthly rental housing. Yet the government has concentrated on strengthening property holding taxes while presenting few concrete measures to stabilize the rental market. Even its recent real estate policy forums, which focused on housing supply, finance and taxation, devoted little attention to rental issues.
Another housing policy discussion chaired yesterday by Prime Minister Han Seong-sook likewise produced no meaningful rental measures. The government should recognize that higher property holding taxes could ultimately be passed on to tenants through higher deposits or rents, making the shortage even worse. As rental costs continue to rise, more tenants may feel compelled to buy homes, adding demand to the sales market and pushing housing prices even higher.
The government and the presidential office are reportedly preparing measures to increase the short-term supply of rental housing, but those plans will matter only if backed by concrete implementation. The tax reform package expected to be announced soon, centered on higher property holding taxes, should also be carefully evaluated for its impact on renters. Kim Yong-beom, the presidential chief of staff for policy, has said the government is considering an "exit strategy" for owners of multiple homes. Any policy should reflect market realities. Above all, punitive taxes on high-priced homes must not end up increasing the burden on tenants. Stabilizing the rental market is the starting point for stabilizing the broader housing market.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
