Rental homes are drying up... "We might as well scrape together everything we have and buy a house" [Aftermath of real estate tax changes]

#. A newly married tenant couple living on the outskirts of Seoul recently found themselves in a difficult position as they prepared to move. When they went to a real estate agency to look for a jeonse lease, they found that not only jeonse but also monthly rentals had virtually disappeared. The three Gangnam districts (Gangnam, Seocho and Songpa) still had relatively more listings, but prices were far beyond their reach. In the end, they decided, "We might as well scrape together everything we have and buy a house," and purchased a mid-priced apartment in Seoul.


Ahead of real estate regulations, including a tax reform plan, the share of apartment purchases in Seoul has reached a five-year high. Last October, all of Seoul was designated as a land transaction permit zone, tightening actual residence requirements. As rental supply shrank sharply in the process, many people grew weary and chose to buy rather than rent. With restrictions also expanding on non-occupied homes, demand for purchases is expected to rise further.
A full analysis by Financial News of five years of apartment transactions in Seoul from January to July, using the Ministry of Land, Infrastructure and Transport's real transaction disclosure system, showed on the 9th that purchases accounted for 39% of all transactions this year, the highest level on record.
That is more than triple the 11.2% recorded five years ago in 2022. At the time, Seoul apartment rental transactions, including jeonse and monthly rent, came close to 73,000, while purchase transactions totaled just 9,083. The share has risen every year since then. In the same period in 2023, purchases accounted for 17.9% of all transactions. The figure then climbed to 27.3% in 2024 and 37.5% last year.

If jeonse and purchases, the two most preferred housing options, are compared on their own, the gap becomes even wider. In January to July 2022, purchases accounted for just 19.9% of all purchase and jeonse transactions, falling short of 20%. But in 2023, the share jumped sharply to 27.8%, then rose vertically to 40.3% in 2024, 52.8% in 2025 and 59% in 2026.
The fundamental reason for the rising share of purchases is the rental shortage. As the supply of jeonse and monthly rentals, which had served as a housing ladder, shrank, prices rose sharply and more buyers turned to purchasing homes.
There is still room for the share of purchases to rise further this year. The reporting deadline for real estate purchases to the relevant city, county or district office is within 30 days of the contract date. In other words, some transactions made in July have not yet been reflected in the system.
[email protected] Kwon Jun-ho Reporter