One-Third of Seoul Apartment Jeonse Disappeared in One Week

Amended Licensed Real Estate Agents Act Imposes Up to 5 Million KRW Fine for False Listings, Fully Enforced from 21st
Rental Market Tightens as Jeonse Listings Disappear Amid Implementation of Lease Laws Including Jeonse Rent Cap

[Asia Economy Reporter Onyu Lim] Within just one week, the number of Seoul apartment jeonse (long-term lease) listings has decreased by 30%. This is due to a shortage of listings following the implementation of the 'Lease 2 Acts'?the Jeonse and Monthly Rent Cap System and the Lease Renewal Request Right System?along with the disappearance of false listings. However, as bait listings priced below market value have vanished, some landlords are raising their asking prices.

According to Apartment Real Transaction Data (Asil), a real estate big data company, on the 22nd, the total number of apartment listings for sale and jeonse/monthly rent combined in Seoul was 57,447 as of the 21st, when the grace period for the amended Licensed Real Estate Agent Act?which imposes fines of up to 5 million KRW for false or exaggerated listings?ended. Compared to 67,655 listings on the 14th, the number of listings dropped by more than 10,000 in just one week.

The amended Licensed Real Estate Agent Act prohibits not only non-existent false listings but also advertisements for listings that exist but cannot be brokered or are not intended to be brokered. Although it was enacted on August 21, enforcement and penalties began after a one-month grace period on the 21st.

The decline in jeonse listings is particularly steep. The total number of jeonse listings for apartments in Seoul was recorded at 9,052, a sharp 30% drop from 12,937 a week earlier. For example, in Songpa-gu Sincheon-dong, Parkrio's listings fell from 87 to 49. Despite being a mammoth complex with 6,864 households, jeonse listings account for less than 1%. During the same period, Hills State Sinchon in Bukahyeon-dong, Seodaemun-gu, dropped from 149 to 80 listings, and Centras 1 and 2 in Sangwangsimni-dong, Seongdong-gu, decreased from 70 to 41 jeonse listings.

Compared to the beginning of the year, the decrease in Seoul apartment jeonse listings is even more pronounced. Considering there were 50,029 listings on January 21, the number has shrunk to about one-fifth in eight months.

A representative from A Licensed Real Estate Agency in Sincheon-dong, Songpa-gu, explained, "Ahead of the amendment's enforcement, we received notices from various real estate online platforms to check for false listings, so we cleaned them all up last weekend. Because some parts were ambiguous, we also temporarily made the blogs that advertised listings private."

The market's evaluation of the system is generally positive. Bait listings targeting prospective buyers and tenants have disappeared, and so-called 'cage operations'?where brokers collude to lower market prices?have decreased.

However, the reduction of false listings combined with the implementation of the Lease 2 Acts and the waiting demand for the 3rd New Town subscription is stirring market anxiety, which is pointed out as a problem. Mr. B, in his 40s, living in jeonse in Seongdong-gu, said, "I plan to move early next year due to my children's education, but the lack of jeonse listings makes me anxious."

Concerns are also rising that the sharp drop in listings could trigger a rise in housing prices. Mr. C, in his 30s, said, "Since false listings disappeared, the price of the apartment I was considering buying has increased by 40 million KRW. Sellers are trying to get prices higher than actual transaction prices no matter what."