Like climbing a mountain |
Renting in Seoul's competitive housing market in 2026 can be challenging. With housing prices rising around 9 percent year-on-year in 2025, marking the sharpest spike in 19 years, the news warned of the death of rentals, especially Korea's lump-sum "jeonse" rental system.
Some 21 years ago, when I rented my first apartment, it was not that difficult. My past experiences made me pretty complacent — until I actually had to find a place recently.
Circa 2005, there were plenty of jeonse rentals, the Korean system where people pay a large, refundable lump-sum deposit rather than monthly rent for multiyear leases. I had the fortune of living 16 years in one such place — both the landlord and I were too lazy to bother with changes.
Then, about five years ago, I had to move to a new apartment nearby. Unfortunately, the apartment buildings where I had lived were all scheduled to be torn down and rebuilt as new apartment buildings with updated units. Of course, they became more expensive. As neighborhoods soon turned to "construction mode," where buildings are torn down and rebuilt en masse, they also had the effect of pushing up the median price of housing in the neighborhood, something felt broadly across Seoul.
To be fair, as Seoul continues to maintain its population density as the nation's political and financial hub, it is natural that housing prices would rise. Changes in government and policy and subsequent housing price fluctuations have created a very tricky market. I once thought buying a house meant buying one you wanted to live in. A colleague corrected me, saying, "No, you buy what other people want to live in." Also, while hoping for more housing development across Seoul, I had thought districts should also build quality public assets like libraries and sports centers with swimming pools. These pools exist, but sadly all in swanky new apartments.
The most preferred type of housing — large apartment complexes — have the highest entry barriers. Then there is mixed-used housing, which has commercial facilities on the lower floors and apartment units above, and shorter "city" apartments with fewer floors and smaller units. National statistics estimate the number of apartments at around 11.66 million units nationwide. With high-rise apartments heavily favored, the figure may not live up to the demands of Korea's population of some 50 million people. In addition, the number of single households continues to rise, accounting for ownership of 22.5 percent of apartments in 2024. Officetels, offering studio and small apartments that can be used for commercial purposes, are increasingly popular, especially among young people. More traditional housing types like low-rise apartments and houses remain, with prices naturally varying according to size. What one buys will depend on one's savings. But rentals have shifted toward monthly rents or even "half-jeonse," where one puts down a large lump-sum deposit while also paying monthly rent.
Changes in housing policies, such as allowing renters to automatically renew their contract after the first two years with a 5 percent cap on rent increase and a national interest rate that makes lump-sum deposits unattractive, are some other factors behind the shift toward monthly rents. These factors make it quite difficult to find quality housing, especially if you are young and just starting out on your own.
On Tuesday, housing authorities reported that the officially announced prices of apartments in Seoul jumped 18.67 percent in 2026. It is the highest increase in five years, and much higher than the average yearly rise of 9.16 percent. President Lee Jae Myung continues to state his resolve to address housing prices. One of his central messages is for people who own multiple residences to sell property they may not need, as the government will end exemptions on capital gains taxes on May 9. Aspiring homeowners are waiting for the possibility of cheap housing, but ironically, that suggests a bleak outlook for the housing supply. The government must come up with a speedier plan to provide its residents with housing worth calling a home.
The writer is a member of the editorial board at The Korea Times.