Seoul's apartment rental prices have increased at a rate surpassing that of sales prices. This trend is particularly pronounced in the North Seoul area, where rental prices, previously considered affordable, have seen double-digit increases, adding to the housing cost burden for low-income and genuine demand tenants.
According to the Korea Real Estate Agency, as of the first week of October, rental prices for Seoul apartments have risen by 8.35% this year. This figure is 0.04 percentage points higher than the cumulative increase in sales prices (8.31%). Compared to the same period last year, when rental prices rose by only 1.87%, this year's increase is approximately 4.5 times greater.
Regionally, the North Seoul area, where rental prices were relatively lower and demand has surged, has seen significant increases. Seongbuk-gu recorded the highest cumulative rental price increase this year at 14.08% among Seoul's 25 districts. Other districts in the northeastern region, including Nowon-gu (13.52%), Gangbuk-gu (10.94%), Seongdong-gu (10.84%), and Dobong-gu (10.82%), also experienced double-digit increases.
For instance, in Seongbuk-gu's Gileum-dong, an 84-square-meter F-type unit at 'Raemian Gileum Centerpiece' was leased for 980 million won on October 7, marking an increase of about 100 million won from a year ago. In Nowon-gu's Junggye-dong, a first-floor unit at 'Cheonggu 3rd Complex' was newly leased for 850 million won on the same day, while a fourth-floor unit in the same complex is currently listed for 900 million won.
Seongbuk-gu features a concentration of apartment complexes with good access to the city center, particularly in the Gileum, Donam, and Hawolgok-dong areas. Nowon-gu also has large apartment complexes and well-established educational and living infrastructure in the Sanggye, Junggye, and Hagae-dong areas. The increase in sales prices and lending restrictions have led potential homebuyers to remain in the rental market, where demand for leases is concentrated among those wishing to maintain their existing living environments near workplaces and schools.
A decrease in new supply is also cited as a factor contributing to instability in the rental market. According to Real Estate R114, the number of apartments scheduled for occupancy in Seoul is expected to drop from 37,103 units last year to 25,281 units this year, a decrease of 31.9%. Projections indicate that this number will further decline to 18,682 units next year and 13,683 units by 2028. Given that it takes several years from approval and construction to actual occupancy, addressing the supply shortage in the short term is challenging.
Nam Hyuk-woo, a researcher at Woori Bank, noted, "As restrictions on rental loan limits and guarantees have tightened, there has been an increase in lease contracts with cash guarantees, accelerating the trend toward monthly rentals in line with landlords' preference for cash flow. Ultimately, the scarcity of pure rental listings is becoming a recurring issue."
If the rise in rental prices continues, it could impact tenants' housing costs and their ability to relocate. Some genuine demand tenants may consider moving to relatively cheaper suburban areas or purchasing homes, but options remain limited due to lending restrictions and increased sales prices.
Nam added, "As rental listings become scarce, tenants unable to renew their leases are increasingly seeking rental options in adjacent areas, which in turn drives up monthly rental prices again."
* This article has been translated by AI.
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