Invest1 publisher3 min readPublished
Four districts outside Gangnam drove half of Seoul's high-rent lease increase
Seoul's apartment leases above 3 million won a month rose 9.7% to 6,570 through September 22, and every added contract came from the 22 districts outside Gangnam, Seocho and Songpa, where the count fell by three.
The Investor · Invest desk
What happened
- Seoul logged 6,570 apartment leases charging 3 million won a month or more from January 1 through September 22, up 9.7% from 5,988 in the same stretch last year, on Land Ministry transaction data.
- Mapo District was the largest single mover, rising more than 40% to 459 high-rent contracts from 325 a year earlier.
- Seoul apartment jeonse prices have risen for 84 consecutive weeks since February last year, and this year's cumulative gain of 7.79% is about 4.7 times last year's 1.66%.
- Real Estate R114 projects Seoul apartment completions falling to 25,281 units this year from 37,103 last year, then to 18,682 next year and 13,683 in 2028.
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Why it matters
- cost Deposits held roughly flat while the average rent rose about 14%, so the added housing cost is paid out of monthly income, at 19.68 million won a year on the city average.
- decision A household that cannot raise 850 million won now chooses to pay 3.5% to 4.2% a year for the same 84-square-meter unit, a price it can only judge against what borrowing the deposit would have cost.
- constraint With completions 63% lower by 2028, a tenant signing a two-year renewal now will reprice into a thinner pipeline, and no supply-side relief arrives inside that lease cycle.
- contradiction Brokers describe high rents spreading to the city's edges, but the six outlying districts hold 33 of the 6,570 contracts, so the volume sits in mid-price inner districts instead.
The increase is 582 contracts citywide, and since the three Gangnam-area districts slipped by three, the other 22 added 585 between them, to 2,674 from 2,089 [1][2][1][2]. That is a 28% rise [2]. Gangnam, Seocho and Songpa now hold 59.3% of Seoul's 3-million-won-plus leases, down from 65.1% a year earlier [3]. Seven of every 10 lease contracts signed in the city this year were monthly-rent deals [8].
Four districts supplied most of the 585. Mapo added 134 contracts, Gangdong 81, Dongjak 48 and Dongdaemun 39, which comes to 302, or 51.6% of the non-Gangnam increase [3][4][13][4].
The outlying districts move by large percentages on small counts. Nowon, Dobong and Gangbuk logged 12 high-rent contracts between them through September 22, up from one [5], and Geumcheon, Gwanak and Guro went to 21 from nine [6]. Those six districts contributed 23 of the 585 added contracts and hold 33 of the city's 6,570 [5].
Brokers attribute the shift to shrinking jeonse supply and rising deposits, with a shortage of listings in newly built complexes as the main driver [18]. "When a new complex opened late last year, rents for 84-square-meter units settled at 2.5 million to 3 million won a month with a 50 million won deposit," an agent in Gangbuk District said. "Jeonse for the same size was above 700 million to 800 million won then and has since reached 900 million won, so tenants who cannot raise a large lump sum are choosing high monthly rents." [10] The swap is 30 million to 36 million won of annual rent in place of 850 million won of deposit the tenant never posts, an implied 3.5% to 4.2% a year [6].
In Dongdaemun, jeonse listings have fallen 53% to 315 from 671 at the start of the year, according to the property platform Asil [12], and contracts at 3 million won or more rose 73% to 92 [13]. "Jeonse for 84-square-meter units passed 1 billion won as redevelopment complexes in Cheongnyangni began accepting residents," an agent in the district said. "Even those listings are scarce, so tenants are accepting high rents." [11]
Two readings compete, and the completion pipeline separates them. One is credit: deposit inflation has outrun what tenants can borrow or save, so households convert to monthly terms [7], and more sitting tenants renew instead of moving, with the government's tilt toward owner-occupiers cited as pulling units out of the rental pool [17]. The other is composition: newly built complexes let for the first time arrive at 3 million won and above, so the high-rent count follows deliveries. Completions fall 63% between last year and 2028 [14][7]. If composition is the driver, the Mapo and Gangdong counts flatten as that pipeline empties; if they keep climbing while deliveries shrink, demand is setting the price.
I take the credit reading, with one limit: the six outlying districts contribute 23 contracts, and a citywide affordability claim cannot rest on them. The government's housing plan is built on 1.19 million publicly backed homes, and critics say it will do little for the rental market near term [15]. "Programs such as monthly rent subsidies for young adults may ease housing costs for now, but limited, temporary cash support will not go far in a market with constrained supply," said Shin Bo-yeon, a professor of real estate and AI convergence at Sejong University [16].
What to watch
- Asil's Dongdaemun jeonse listing count, now 315 from 671 at the start of the year, and whether it keeps thinning.
- Whether the Gangnam trio's high-rent count breaks below 3,896 in full-year data or turns back up.
- Whether the 1.19 million publicly backed homes plan is amended to allocate units to the rental market.