Seoul's apartment jeonse (lump-sum deposit lease) listings have decreased by approximately 20% over the past year, raising expectations that the rental housing shortage will intensify ahead of the spring moving season next year.
The real estate market is experiencing a severe supply-demand imbalance, with jeonse and monthly rental demand increasing amid a sluggish apartment sales market and declining rental inventory. In this environment, demand is shifting toward officetels—a hybrid residential-commercial property type—which face relatively fewer regulations and can be used for both owner occupancy and rental purposes.
According to real estate platform Asil, Seoul apartment jeonse listings stood at 25,005 units as of the 10th, down 21.5% from 31,814 units at the beginning of this year.
The Korea Real Estate Board's Seoul jeonse supply-demand index reached 104.4 in the first week of December (as of December 1). The index measures the balance between supply and demand in the jeonse market, with readings above the baseline of 100 indicating demand exceeds supply.
The monthly jeonse supply-demand trend also recorded 105.0 in October, the highest level in 48 months since 108.3 in October 2021. Jeonse prices continue to rise as well. Seoul apartment jeonse prices increased 0.14% week-on-week on the same day, marking 43 consecutive weeks of gains.
By district, Seocho (0.32%), Songpa (0.28%), Gangdong (0.25%), Yangcheon (0.21%), Gangseo (0.17%), Dongjak (0.17%), and Yeongdeungpo (0.16%) exceeded the average.
Analysts attribute the jeonse shortage largely to the government's October 15 real estate measures. Under the new policy, mortgage limits are now tiered by apartment price, and the loan-to-value (LTV) ratio in regulated areas was lowered from 70% to 40%, dampening purchase demand.
Prospective buyers waiting on the sidelines have shifted to the jeonse market, increasing rental demand. However, jeonse supply has been structurally constrained.
Under the October 15 measures, jeonse loans for single-home owners—previously exempt from regulations—are now subject to debt service ratio (DSR) rules, reducing loan limits. Gap investment, where buyers purchase properties while keeping existing jeonse tenants, has also been effectively blocked.
Additionally, with all of Seoul now designated as a land transaction permit area, new home purchasers in these zones are required to reside in the property for a set period, making it difficult to offer jeonse leases for at least two years. This has reduced the pool of newly purchased homes available for jeonse, weakening supply capacity in the rental market.
As the jeonse supply-demand imbalance intensifies, officetels are gaining attention as an alternative housing option. Officetels are classified as "quasi-housing" under the Housing Act, subjecting them to relatively lighter regulations while allowing both owner occupancy and rental use.
In practice, LTV ratios for officetel mortgages can reach up to 70%, higher than apartments, and most are exempt from owner-occupancy requirements and financing plan submissions. The gap investment strategy, now virtually impossible with apartments, remains viable with officetels, attracting both end-users and investors.
"The strengthened loan regulations and expanded land transaction permit system have simultaneously increased jeonse demand while constraining supply," a real estate industry official said. "Combined with declining move-in inventory, the jeonse shortage will likely continue into next year."
"Demand is clearly shifting, as seen in rising officetel transaction volumes," the official added. "However, rather than investing indiscriminately just because regulations are lighter than for apartments, buyers should comprehensively evaluate future value, rental yields, and location."
Amid these conditions, demand is growing for the residential officetel 'Lotte Castle Le West.' Developed by Lotte Engineering & Construction in the CP2 block of the Magok Urban Development District in Gangseo-gu, Seoul, 'Lotte Castle Le West' is a mixed-use residential complex comprising five buildings ranging from six underground to 15 above-ground floors.
The development includes 876 officetel units with exclusive areas of 45 to 103 square meters, along with retail, office, and ancillary facilities. Completed in August last year, immediate move-in is available.
Lotte Castle Le West is located in a triple transit hub with access to Magok Station on Subway Line 5, and Magongnaru Station on Line 9 and the Airport Railroad. A direct underground passage connects the complex's second basement level, enabling convenient access.
Gimpo Airport is a 10-minute drive away, while Incheon International Airport is 30 to 40 minutes away, providing optimal conditions for both domestic and international travel as well as business trips.
Currently, approximately 200 domestic and foreign companies in research and development fields including information technology (IT), biotechnology (BT), nanotechnology (NT), and green technology (GT) have signed tenancy agreements in the Magok District. LG Science Park, Lotte, Kolon, Nexen, and S-Oil have already moved in.
Recently, LG AI Research, Korean Air, AirZeta, E-Land Group, and DL Group have also established operations there, while Daemyung Sono Group and major business divisions of Lotte Engineering & Construction are pursuing relocations.
Lotte Castle Le West offers walking access to the Magok Industrial Complex.
The area boasts abundant lifestyle infrastructure. Commercial facilities within the Magok MICE complex and Traders Magok, the largest in the southwestern Seoul metropolitan area, are within walking distance. Cultural and medical infrastructure including LG Arts Center and Ewha Womans University Seoul Hospital are well established.
Large shopping malls including Lotte Mall (Lotte Department Store, Lotte Cinema, Lotte Mart) Gimpo Airport branch and NC Department Store are easily accessible.
The approximately 500,000-square-meter Seoul Botanic Park, equivalent to 70 soccer fields, and various neighborhood parks are located nearby, providing a pleasant residential environment.
The development offers differentiated product features befitting a new branded complex. Various floor plans and 1.5-room, 2-room, and 3-room designs allow selection based on lifestyle, accommodating households from one to four persons.
Balcony space is provided by unit type to expand usable living area. The 69-square-meter exclusive area type features a three-bay plate structure design maximizing ventilation. The 91-square-meter exclusive area type features a three-sided open tower design offering expansive city views.
The development includes a "full-furnished" system with complimentary entrance inner doors, electric ovens, washing machines, dryers, kimchi refrigerators, and refrigerators.
Community facilities on the second floor and second basement level are among the best in the area. The second floor houses a mom's lounge, kids' café, individual study rooms, study rooms, open study area, library, lounge and bar, dining and café, and wine lounge.
The second basement level features fitness facilities, indoor golf club, screen golf, locker rooms, group exercise rooms, and changing rooms.
The Lotte Castle Le West sales promotion center is operating at the Lotte Castle Le West AVENUE area.
