[Report] Jeonse Shortage Due to Sillim Line Opening... "No Rooms, Youths Are Being Turned Away"

High Demand for Youth Rental Leases Near Dangok Station
But New Station Development Drives Jeonse Price Increase
Leading to Shortage of Jeonse Listings and Price Mismatch

On the afternoon of the 9th at 3 PM, I visited the one-room apartment area in Boramae-dong, Gwanak-gu, Seoul. A real estate agent said, "The jeonse prices have risen significantly compared to last year," adding, "There are cases where we have to turn people away because their desired conditions are not met."
Photo by Hwang Seoyul

[Asia Economy Reporter Hwang Seoyul] "The jeonse prices have recently surged sharply, so I gave up. I found out it got more expensive because of the Sillim Line." (Lee Minsu, 28, a pseudonym, a young worker looking for listings around Boramae-dong for commuting to Yeouido)

On the afternoon of the 9th, around 3 PM, I visited the one-room apartment area near Danggok Station (scheduled to open in May) in Boramae-dong, Gwanak-gu, Seoul. During the roughly 20 minutes of conversation with the representative of A Real Estate Agency (licensed), two calls inquiring about jeonse and monthly rent came in. The A Real Estate representative said, "With the new station opening, housing prices have only gone up," adding, "Although inquiries about jeonse and monthly rent are usually many, it has become even harder to find jeonse listings that meet the conditions for young tenants." Then, he showed me several pages of tenant inquiry lists. Next to the names were conditions such as 'LH loan' and deposit under 120 million won.

Due to the new Sillim Line (from Saetgang Station to Gwanaksan Station), which allows travel across the southwestern area from Gwanak-gu to Yeongdeungpo-gu at once, nearby jeonse prices are rising. A multi-family house (exclusive area 23.89㎡) within 300 meters radius of Danggok Station was leased for jeonse at 154.5 million won in March last year, but this month, the same size unit in the same building was leased at 180 million won. According to the Korea Real Estate Board’s row house and multi-family jeonse price index, the southwestern area including Gwanak-gu recorded 101.3 in March, up 1.7 points from 99.6 in the same month last year.

On this day, Dangok Station was already shaped like a station, with access restricted, ahead of its scheduled opening in May. Dangok Station is one of the stations on the newly established Sinlim Line.
Photo by Hwang Seoyul

The problem is that Boramae-dong and the Gwanak-gu area through which the Sillim Line (scheduled to open in May) passes are one-room apartment areas with high demand for youth rental housing. According to the Korea Land and Housing Corporation (LH), among Seoul’s autonomous districts, the proportion of contracts under the LH Youth Jeonse Lease program until the end of April this year was 13.69%, the highest in Gwanak-gu. This indicates that demand for youth jeonse loan funds is concentrated in Gwanak-gu. The new station’s benefits are ironically causing jeonse difficulties for young tenants who lack basic assets. The maximum loan limit for youth jeonse funds is about 100 million to 120 million won. A representative from nearby B Real Estate said, "It’s not only the decrease in jeonse listings that’s a problem, but also that it’s difficult to find listings that meet tenant conditions, so some are turned away."

There are also cases where landlords try to receive the amount of the jeonse price increase as monthly rent. A representative from C Real Estate said, "Jeonse is hard to find these days," adding, "It’s much better to look for a half-jeonse with a high deposit and monthly rent of 100,000 to 200,000 won than to try to find jeonse."