Seoul's property market has been caught this year in an unprecedented triple surge, with sale prices, jeonse (a lump-sum deposit lease) and monthly rents all climbing at once, even as the government has focused its policies on curbing home prices. Jeonse prices have risen at their fastest pace in 15 years, while monthly rents have set record highs month after month since data collection began. With lease prices jumping not only for apartments but also for low-rise multi-unit housing and detached homes, analysts say Seoul households that do not own a home are being pushed into buying out of necessity, with no other option left.
Seoul's combined housing jeonse prices rose a cumulative 5.91% in the first eight months of this year, the steepest gain in 15 years since a 7.62% increase over the same period in 2011, according to monthly housing price data released by the Korea Real Estate Board on the 29th. Cumulative jeonse gains for apartments reached 7.35%, the highest since 2011, when they rose 9.33%.
The rise has been even more pronounced in the monthly rent market. Seoul's combined housing monthly rents climbed a cumulative 5.65% through August, the highest since the data series began in 2016 and nearly quadruple the 1.41% increase in 2024, the previous record. Cumulative monthly rent gains for apartments reached 6.69%, more than 3.5 times the previous high of 1.92% set in 2024.
Lease prices for every housing type in Seoul have risen for 39 consecutive months from the second half of 2023 through August, but the pace has accelerated sharply this year. For Seoul apartments, monthly gains held below 0.3% through the first half of last year before climbing steeply from October, reaching monthly changes of more than 1% between May and July of this year. Apartment jeonse prices rose 0.95% in August, and if September holds at that level, the combined housing jeonse index, now at 101.9, is expected to surpass its all-time high of 102.2 set in January 2022. The jeonse index for low-rise multi-unit housing reached 101.4 in August, already above its 2022 peak of 100.8.
What stands out about this lease crunch is that it has been accompanied by upward pressure on monthly rents, centered on non-apartment housing such as low-rise multi-unit and detached homes. Through last month, cumulative monthly rent gains for Seoul's low-rise multi-unit housing reached 4.51%, outpacing the 4.04% rise in jeonse. For detached homes, monthly rents rose 3.27%, also above the 2.66% jeonse increase. Monthly rents for low-rise multi-unit and detached housing had held average annual changes near zero for about eight years since the data series began, helping to restrain housing costs over the long term. Over the past two years, however, cumulative changes have reached 8.01% and 5.98%, respectively.
Pressure from Seoul's lease market has already spilled over into the sales market. Seoul apartment sale prices rose for an 85th consecutive week as of the third week of September, matching the longest run on record, and cumulative gains through August reached 7.52%, the highest in 18 years since a 10.07% rise in 2008. Gangnam and Seocho districts have declined for four to five straight weeks, but sale prices in Seodaemun, Dongdaemun, Seongbuk, Nowon, Jungnang, Dobong and Gangbuk districts rose 0.3% to 0.4% in a single week, lifting the overall figure. As Seoul home prices climbed steeply, buying interest spread to cities with easy access to the capital's business districts, including Guri, Hanam, Seongnam, Gwangmyeong and Uiwang.
"Prices for expensive apartments in Gangnam are turning lower because of tax changes and other factors, but prolonged instability in the lease market is putting upward pressure on home prices in Seoul and southern Gyeonggi Province," said Nam Hyuk-woo of the Woori Bank real estate research institute. "To stabilize home prices, easing instability in the lease market is the most urgent task."
