Seoul Jeonse Crisis Spreads: Supply Imbalance and Gyeonggi Ripple Effects
As Seoul apartment jeonse supply plummets, causing prices to rise for over 70 weeks, the balloon effect of renters moving to southern Gyeonggi is accelerating.
Seoul Jeonse Market Rising for Over 70 Consecutive Weeks
The supply-demand imbalance in the Seoul apartment jeonse market is approaching a critical point. As of the fifth week of June, the weekly jeonse price increase for Seoul apartments stood at 0.30%, continuing a long-term upward trend of over 70 weeks. Jeonse listings have plummeted by more than 10% since the beginning of the year. This is primarily driven by a lack of new move-in supply and a lock-in effect from lease renewals. The strength in jeonse prices is simultaneously driving up sale and monthly rent prices, leading to a 'triple strength' phenomenon that exacerbates the housing cost burden on tenants.
The 'Exodus from Seoul' Balloon Effect Spreading to Southern Gyeonggi
The recent trend of the Seoul jeonse crisis spreading is rapidly spilling over to the metropolitan outskirts. Renters unable to afford high jeonse deposits are moving to Gyeonggi regions with good accessibility to Seoul, triggering a chain of price increases. The strength is particularly notable in southern Gyeonggi areas such as Seongnam, Gwangmyeong, Hwaseong Dongtan, Yongin, and Hanam.
- Record-breaking Increases: Gwangmyeong and Hwaseong Dongtan are recording some of the highest jeonse price growth rates nationwide as demand pushed out of Seoul concentrates there.
- Acceleration of Purchase Conversion: To avoid surging jeonse prices and pressure to convert to semi-jeonse (rent with deposit), more renters are turning to purchasing homes outright. This has led to an observed phenomenon in the Gyeonggi region where both jeonse and sale prices are rising in tandem.
Second-Half Supply Cliff and Key Variables
With metropolitan apartment move-in volumes for the second half of 2026 expected to fall below historical averages, the supply shortage in the jeonse market is unlikely to be resolved in the near term. The government recently added Hwaseong Dongtan, Yongin Giheung, and Guri as regulated areas to curb demand, but the market stabilization effects will need to be monitored from July onwards. Furthermore, the government's real estate tax reform announcement scheduled for the end of July will be a core catalyst determining the flow of funds in the future sales and rental markets. As calculations become complex for both investors and actual buyers due to policy shifts, a conservative approach based on location-specific supply and demand data is required.