In Seoul's rental market, listings in mid-low price areas are rapidly disappearing, limiting options for tenants. The shortage is particularly pronounced in outer districts like Nowon, Jungnang, and Guro, contrasting with the high-priced rentals in Gangnam.
According to real estate platform Asil, as of July 16, the number of rental listings for apartments in Jungnang dropped to 84, a 78.7% decrease from 412 a year ago. Nowon saw a decline from 1,086 listings to 304, a 72.1% drop, while Guro experienced a 71.5% reduction.
Geumcheon reported a 71.2% decrease in rental listings, with Dongdaemun down 65.6%, Gwanak down 65.0%, and Dobong down 62.3%. Given that the overall decline in rental listings across Seoul is about 16% over the past year, the drop in mid-low price areas is particularly significant.
These areas have historically served as a 'buffer zone' in Seoul's rental market. According to the Seoul Real Estate Information Plaza, the average rental price for apartments in Seoul last month was 660.15 million won. In contrast, the average rental prices were significantly lower in Nowon at 340.60 million won, Guro at 423.23 million won, and Jungnang at 438.71 million won.
The average rental price in Nowon is about half of the citywide average, while Guro's average is only 64.1% of the average. The rapid decline in listings in these price ranges is affecting newlyweds, young people, and households without homes who cannot afford the higher rents in Gangnam or the city center.
As a result, the rental crisis is being felt first in mid-low price areas rather than high-priced regions. Tenants are finding fewer options to move to lower-priced rentals within Seoul. The disappearance of mid-low rental listings may increase pressure to switch to monthly rentals or move to the outskirts in Gyeonggi or Incheon.
One factor contributing to the decline in rental listings is the expansion of land transaction permission zones, which imposes a residency requirement. The government expanded these zones across Seoul as part of its housing market stabilization measures last October. Consequently, buyers in newly designated districts are now required to reside in the property for two years.
The difficulty of gap investments, where buyers purchase homes while renting them out, has made it increasingly common for buyers to move in directly, reducing the number of properties available for rent. This trend is particularly pronounced in mid-low price areas where both investment and actual residency demand have been strong.
Additionally, the increase in lease renewals among existing tenants is exacerbating the shortage of rental listings. An analysis by Zigbang of the Ministry of Land, Infrastructure and Transport's real transaction disclosure system found that the proportion of new rental contracts in Seoul dropped from 52.6% in January to 45.0% last month. Conversely, the share of lease renewals rose from 47.4% to 55.0%.
A real estate industry insider noted, "In a situation where rental prices are rising, tenants are opting to extend their existing contracts rather than search for new rentals. New contracts reflect the increased market rates immediately, while renewals often negotiate based on the previous deposit amount."
* This article has been translated by AI.
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