The government is expanding the supply of newly constructed rental housing, yet existing rental units are experiencing increasing long-term vacancies. While a new rental property in Seoul recorded a competition rate of 52 to 1 for occupancy, 259 units nationwide have remained vacant for over four years.
As of the end of June, the Korea Land and Housing Corporation (LH) reported that out of 200,324 rental units, 8,279 have been vacant for more than six months, accounting for 4.1% of the total inventory. This marks an increase of 9,307 units (4.8%) compared to the end of last year, with long-term vacancies rising by 2,093 units (33.8%) from 6,186. Among the 259 units vacant for over four years, 80 are located in Seoul.
This trend contrasts sharply with the high demand for newly constructed rental units. On September 4, Prime Minister Han Seung-soo inspected a new rental housing project in Yongdu-dong, Dongdaemun District, which saw a competition rate of 52 to 1. This youth-oriented housing, located within a 10-minute walk from Sinseoldong Station, began accepting residents at the end of July.
LH explained that demand can vary even within the same area based on the location and facilities of individual homes. Unlike construction rentals, which are developed as complexes, purchased rentals are scattered across various locations.
An LH official stated, “Even in similar areas, demand can differ if a property is far from a station or located on a hill. However, it is not feasible to secure all housing near transit hubs.”
Some properties, despite offering affordable rent, have struggled to find tenants for extended periods. For instance, 26 long-term rental units in Ulsan, which LH sought to fill in July, are dispersed across Mugunghwa-dong and Hogye-dong. These units range from 18.84 to 34.67 square meters, with one bedroom and no elevators. The security deposits range from 1.49 million to 4.935 million won, while monthly rents are between 49,730 and 139,090 won.
In contrast, private studio apartments in the Mugunghwa-dong and Hogye-dong areas, listed on real estate platforms, have security deposits of 3 to 5 million won and monthly rents of 300,000 to 390,000 won. Despite differences in location and facilities, some long-term rental units remain vacant even though their rents are lower than nearby listings.
However, LH maintains that not all vacancies are due to a lack of demand. Some units are reserved for relocation due to redevelopment projects or emergency housing support.
An LH representative noted, “We do not assess the reasons for vacancies on a case-by-case basis. However, when the target residents are essentially predetermined, delays in redevelopment schedules can result in units appearing as long-term vacancies.”
LH acknowledged the need for a buffer of available units to respond to changes in demand by region and time, making it challenging to eliminate all vacancies. To address this issue, they are implementing measures such as secondary recruitment and relaxing income and asset requirements.
Experts emphasize the importance of thoroughly examining location and demand from the outset of the housing acquisition process. Jo Jeong-hee, a senior researcher at the Korea Research Institute for Human Settlements, stated, “There have been ongoing calls to supply quality housing in areas with high residential preferences to resolve the issue of vacant rental units. This is due to a concentration of rental units in areas with relatively low demand, leading to a mismatch between location and demand.”
Song Seung-hyun, head of Urban and Economy, urged, “Instead of focusing solely on ‘quantitative’ supply, we need to ensure ‘qualitative’ supply based on location verification and quality improvement.”
* This article has been translated by AI.
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