"Living in Seoul is Tough"... Even Renting a Basement Villa Requires an Average of 100 Million Won

Worsening Supply-Demand Imbalance After New Lease Law
Average Monthly Rent for Villas Also Surpasses 620,000 Won

The view of a villa neighborhood from a building in Yangcheon-gu, Seoul, where villa transaction volumes are increasing on the 11th. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Im On-yu] As villa (row house and multi-family housing) rents soar, life in Seoul is becoming increasingly difficult for low-income and single-person households. The average monthly rent has exceeded 620,000 won, and living in a basement floor rental room requires an average deposit of over 100 million won.

Seoul Villa Average Monthly Rent Surpasses 620,000 Won... "Supply-Demand Imbalance Worsens After New Lease Law"

According to a survey conducted on July by real estate platform Dabang on the average monthly rent and deposit trends of row houses and multi-family housing in Seoul by the Korea Real Estate Board, the average monthly rent was recorded at 624,000 won. This is the highest figure since the Korea Real Estate Board began related surveys in July 2015.

The average monthly rent for villas in the central northern Seoul area (Jongno, Jung, Yongsan districts) and the southeastern Gangnam area (Seocho, Gangnam, Songpa, Gangdong districts) reached 844,000 won and 888,000 won respectively, exceeding the Seoul average. In contrast, the northwestern Gangbuk area, including Eunpyeong, Seodaemun, and Mapo districts (557,000 won), and the southwestern Gangnam area, including Yangcheon, Gangseo, Guro, Geumcheon, Yeongdeungpo, Dongjak, and Gwanak districts (521,000 won), fell short of the average.

The average jeonse (lump-sum deposit lease) for villas in Seoul in July was 243 million won. Considering the monthly rent conversion rate of 4%, if the monthly rent deposit is 10 million won, the monthly rent rises to 780,000 won. This amount corresponds to 16% of the median income for a four-person household this year (4,876,290 won).

Additionally, the average monthly rent deposit for Seoul villas also reached a record high of 56,837,000 won since statistics began. Compared to the national average (28,861,000 won), it is about twice as high.

A Dabang official stated, "As the supply-demand balance in the rental market breaks down, both monthly rent and monthly rent deposits are rising," adding, "Due to the lease renewal right and other aspects of the three lease laws, rental supply next year is likely to be restricted, so the supply-demand situation will not improve rapidly."

Even for Basement Rental Rooms, 100 Million Won Needed

Even the basement floors of villas, which have poor living conditions, have seen average jeonse prices surpass 100 million won. A survey of jeonse deposits for villa basement floors under 60㎡ (exclusive area) traded in Seoul showed an average of 100.435 million won this year.

The average jeonse deposit for villa basement floors in Seoul rose from 78.01 million won in 2017, 88.14 million won in 2018, 88.91 million won in 2019, and 95.07 million won last year, finally surpassing 100 million won this year.

A Dabang official explained, "This is the first time since the Ministry of Land, Infrastructure and Transport began compiling related actual transaction prices in 2011 that the average jeonse deposit for villa basement floors in Seoul has exceeded 100 million won," adding, "It appears that the recent sharp rise in housing prices and jeonse and monthly rent prices has also driven up the jeonse deposits for vulnerable housing facilities like villa basement floors."

The area with the highest average jeonse deposit for villa basement floors in Seoul this year was Seocho-gu (174.34 million won), followed by Gangnam-gu (107.73 million won), Jongno-gu (160.31 million won), Yongsan-gu (143.87 million won), Yeongdeungpo-gu (132.14 million won), and Jung-gu (130 million won).

Among villa basement floors, a 59.87㎡ unit in Buam-dong, Jongno-gu was leased for 400 million won, the highest deposit this year. A 41.76㎡ basement villa in Itaewon-dong, Yongsan-gu was leased for 380 million won, and a 59.36㎡ basement unit in Bukahyeon-dong, Seodaemun-gu was leased for 350 million won, both exceeding the average. The area with the lowest average jeonse deposit for villa basement floors in Seoul was Dobong-gu (70.89 million won).