Editorials
Jeonse hit 1 billion won beyond Gangnam District
Seoul’s rental crunch is pushing lump-sum deposits toward 1 billion won ($720,000) in more districts as regulations and scarce listings burden tenants.
As Seoul’s apartment jeonse (lump-sum deposit) shortage worsens, jeonse prices for officetels, traditionally less popular than apartments, have risen to their highest level in four years, while monthly rents have reached an all-time high. The photo shows jeonse and monthly rental listings posted at a real estate agency in Seoul in mid-July.
NEWS1
Seoul’s jeonse (lump-sum deposit) market is becoming increasingly unstable. Even in areas outside Gangnam District, southern Seoul, and the so-called Ma-Yong-Seong districts — Mapo, Yongsan and Seongdong, among Seoul’s most sought-after housing areas after Gangnam — apartments with the standard 84-square-meter (904-square-foot) floor area in the Gireum-dong neighborhood of Seongbuk District, central Seoul, and the Yongdu-dong area of Dongdaemun District, eastern Seoul, are being leased for around 1 billion won ($720,000). Jeonse is Korea’s lump-sum key money lease system, under which tenants pay a large deposit instead of monthly rent.
The cumulative increase in Seoul apartment jeonse prices reached 7.79 percent as of the second week of September, 4.7 times the rise during the same period last year. Seoul apartment prices have climbed for 86 consecutive weeks, with gains spreading beyond Gangnam District, while dwindling jeonse listings are increasing the burden on tenants. Tough restrictions in Gangnam have pushed buying demand elsewhere, lifting both home prices and jeonse deposits. President Lee Jae Myung called this spillover a “leveling process,” but how many people will find that convincing?
The jeonse crunch has multiple causes, including insufficient supply and rising home prices, but the government cannot easily dismiss criticism that successive regulations have further reduced rental listings.
Under its Oct. 15, 2025 measures, the government designated all of Seoul and parts of Gyeonggi as land transaction permit zones. The system restricts purchases of homes with existing jeonse tenants, thereby limiting rental supply. The government’s decision to extend a grace period for owner occupancy just four months after granting one in May also suggests the original policy was unrealistic.
The government also introduced temporary relief only three months after restoring heavier capital gains taxes on owners of multiple homes. A tax reform proposal to reduce comprehensive real estate tax deductions for owners of one home who do not live in it was similarly reversed within a month. Aggressive efforts to suppress home purchases ultimately reduced the supply of jeonse and monthly rentals. Property taxes have become so complicated and change so frequently that some tax accountants reportedly avoid related work.
The administration’s policy of distinguishing between owner-occupied and nonowner-occupied homes is increasingly harming the housing market, particularly rentals. The government must comprehensively review tax and occupancy rules to encourage jeonse listings while accelerating housing supply.
Instability in jeonse and monthly rents strikes directly at ordinary households. The government must recognize that policies intended to suppress purchases can worsen rental shortages and urgently restore balance between regulation, rental supply and new housing. Without such changes, the burden of policy failure will continue falling most heavily on tenants.
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.
