"I have to move after Chuseok, and I’m beside myself" ... Jeonse listings have all but dried up for the fall moving season

[Financial News] As the fall moving season gets fully underway, the shortage of jeonse listings is worsening. With supply falling short of demand, jeonse deposit prices are also rising at a faster pace.
Since July 2020, when amendments to the Housing Lease Protection Act introduced the rent cap system and the right to request lease renewal, lease terms have effectively doubled from two years to four. This has reduced the volume of jeonse listings entering the market, leading to a prolonged shortage of listings and continued price increases.
The Seoul jeonse supply-demand index compiled by the Korea Real Estate Board (KREB) remained above 100 for 16 consecutive months after the law was amended. This indicates that listings failed to keep up with demand.
Conditions in the jeonse market are becoming even more serious. The relevant index has exceeded 110 since May and peaked in July. That was 1.6 points higher than during the period when the jeonse shortage was particularly severe in the aftermath of the Housing Lease Protection Act amendments. The shortage of non-apartment housing, lending restrictions and the expansion of land transaction permission zones are believed to have combined to worsen the shortage of jeonse listings.
The rate of increase in jeonse deposit prices is also at a record high. From January through August, jeonse deposit prices for Seoul apartments rose 7.4%, nearly five times the rate recorded during the same period last year. The increase was also notably high compared with the rate during the same period over the past 10 years.
Monthly rentals have not been spared. As a result, total jeonse and monthly rental transactions for Seoul apartments fell by nearly 20% from a year earlier.
Notably, despite the sharp drop in transactions, the share of renewed leases increased by more than 7 percentage points.
As jeonse and monthly rental prices rise, more tenants are seeking to remain in their current homes. Some are also choosing not to exercise their right to request lease renewal immediately, instead saving it in case the shortage of jeonse listings and the price uptrend persist.
With the fall moving season now underway, the shortage of jeonse listings and the rising trend in prices are expected to continue for the time being.
[email protected] Ahn Ga-eul Reporter