Seoul Jeonse Prices 'Peak and Then Fall' This Year... "Buyers Delay, Balloon Effect in Jeonse"

Analysis of '2025 Apartment Market Outlook' by 10 Real Estate Experts
All 10 Predict Seoul Apartment Jeonse Prices Will 'Rise Further'

Interest Rate Cuts, Supply Reduction, Loan Regulations, Weak Sales
Mounting Factors Driving Jeonse Price Increases

'2025 Apartment Market Outlook' Article Series Order>
① Sales Market (Seoul, Gyeonggi-do and Incheon, Provinces)
▶② Jeonse Market (Seoul, Gyeonggi-do and Incheon, Provinces)
③ Market Impact and Policies

Seoul Walking Column - A residential complex in downtown Seoul where apartments and houses coexist. Photo by Yongjun Cho jun21@

"Due to the shortage of new apartment move-in supply, jeonse prices will remain unstable throughout the year."

Real estate experts predicted the Seoul apartment jeonse market this year as such. They anticipated that the reduction in new apartment supply, the concentration of leases due to mortgage loan limit regulations, and the possibility of future interest rate cuts will push up jeonse prices. According to Asia Economy's '2025 Apartment Market Outlook' on the 7th, all 10 experts who participated in this survey forecasted that "the Seoul apartment jeonse market will continue an 'upward then stable' trend." The survey was conducted on the 27th of last month through questionnaires and written interviews.

Experts expected the Seoul apartment jeonse price increase rate to be between 1% and 5%. At the end of last year and the beginning of this year, jeonse prices showed a temporary pause. According to the 'Weekly Apartment Price Trends for the Fifth Week of December 2024' released by the Korea Real Estate Agency on the 2nd, Seoul jeonse prices remained flat (0.0%). The decline in areas with high move-in supply such as Gangdong-gu (-0.06%), Seongdong-gu (-0.05%), and Dongdaemun-gu (-0.04%) offset the rise in Seocho-gu, Gangseo-gu, Nowon-gu, and Jung-gu (0.03%).

Supply Shortage Due to Tightened Regulations "Will Stay in Jeonse"

Due to the impact of loan regulations and other factors, apartment transactions have slowed down, causing listings to continue accumulating. On the 24th, sales and jeonse (long-term lease) flyers were posted at a real estate agency in Gangnam, Seoul. Photo by Kang Jin-hyung

Experts viewed the breaking of this flat trend as a matter of time. They expected interest rate cuts and decreased move-in supply to have a significant impact on jeonse prices. Yoon Soo-min, Senior Real Estate Specialist at NH Nonghyup, said, "Currently, jeonse loan interest rates are high, causing prices to weaken, but if the Bank of Korea lowers the base rate and loan interest rates fall, prices will rise." He added, "In the second half of this year, supply instability is very likely to dominate the jeonse market atmosphere, so the sense of insecurity will expand further." Park Won-gap, Senior Real Estate Specialist at KB Real Estate, also said, "With jeonse loan interest rates expected to fall and more people choosing to stay in jeonse rather than buy homes, Seoul jeonse prices will show an 'upward then stable' trend."

The gloomy outlook over the sales market in the first half of this year is also expected to contribute to jeonse price increases. Kim Je-kyung, Director of Toomi Consulting Research Institute, said, "When buyer sentiment is as depressed as now due to impeachment politics and loan regulations, demand for jeonse and monthly rent increases." Yoon Ji-hae, Head of Research at Real Estate 114, said, "Since mortgage loan limit regulations were tightened from September last year, sales demand has shifted to jeonse and monthly rent demand," adding, "This balloon effect will cause jeonse prices to rise."

Ham Young-jin, Head of Real Estate Research Lab at Woori Bank, said, "If you want relatively affordable lease properties due to the expiration of the jeonse contract renewal right, you should look at areas with high move-in supply," mentioning, "Within Seoul, Dongdaemun-gu can be pointed out."

Most Responses for 'Upward then Stable' in Gyeonggi-do and Incheon

The outlook for the apartment jeonse market in Gyeonggi-do and Incheon also had the most responses for 'upward then stable' (7 people). This was followed by 'flat' (2 people) and 'up then down' (1 person). Kim Hyo-sun, Senior Real Estate Specialist at NH Nonghyup, said, "In Gyeonggi-do and Incheon, apartment move-in supply is also decreasing significantly, so the upward trend will continue mainly in areas with high demand."

Kim added, "Prices may fall in oversupplied areas such as Pyeongtaek, Anseong, and Icheon, but the upward trend will continue mainly in the southern Han River area with excellent location." He also said, "Considering the long-term relocation to the first-generation new towns, I recommend choosing areas where you can live stably for four years, given the worsening jeonse supply shortage."

Ko Jong-wan, President of the Korea Asset Management Research Institute, forecasted, "Especially in Suwon, Yongin, Seongnam, and Hwaseong, the decrease in move-in supply is prominent, so jeonse prices may rise."

Provincial Jeonse Stronger than Sales

An HMM container ship is docked at Busan Port. Photo by Jinhyung Kang aymsdream@

Many experts believed that apartment jeonse prices in the provinces would be stronger than sales prices. Regarding provincial apartment sales prices, 6 out of 10 experts answered that prices would fall due to unsold inventory accumulation. However, half of the experts (5 people) said jeonse prices would be 'flat.' Responses of 'upward then stable' (2 people), 'up then down' (2 people), and 'up then down then further down' (1 person) were also evenly distributed.

Kim Kyu-jung, Real Estate Specialist at Korea Investment & Securities, predicted, "This year, provincial apartment jeonse prices will show an upward trend compared to sales prices." This is because more people are choosing jeonse over buying homes due to loan regulations and political uncertainty even in the provinces. Experts also said that if jeonse loan interest rates fall, the long-term downward trend of provincial apartment jeonse prices will shift to a slight decline. Lee Chang-moo, Professor of Urban Engineering at Hanyang University, said, "Once the impeachment political situation is over, migration demand centered on the jeonse market will increase in the provinces."