One number catches the eye. As of the end of 2024, single-person households numbered 10,122,587, accounting for 42% of all households in Korea. This represents an increase of more than 1 million households since 2020. The figure of over 10 million people living alone exceeds the population of Seoul (9.33 million).
What does their housing situation look like? According to the Ministry of Land, Infrastructure and Transport's housing survey, 41.6% of all households live in rental arrangements such as jeonse (a Korean lease system requiring a large lump-sum deposit instead of monthly rent) or monthly rent. Two main channels absorb this demand: residential rentals such as apartments and multi-family housing, and non-residential rentals such as officetels and co-living spaces. Yet the corporate rental business, which should be meeting this massive demand, remains largely stagnant.
The reason lies in the cost structure. When a corporation purchases housing to enter the rental business, five layers of barriers await. These include a 12% acquisition tax surcharge, comprehensive real estate tax with no basic deduction, an additional 20% tax on transfers, a 0% loan-to-value (LTV) restriction on mortgages in regulated areas, and a 5% cap on rent increases. Compared to the 1-3% acquisition tax applied to individuals, the starting line itself is different. When these five factors overlap, new entrants are blocked, and burdens accumulate on the cash flow operations of existing operators.
Markets quietly find detours. Co-living (shared housing) is one such result. According to RSQUARE, Seoul's co-living units reached 7,371 as of the first quarter of 2025, a 4.7-fold increase over nine years. The number of rental contracts in 2024 also rose 29% from the previous year.
The on-the-ground picture is even clearer than the numbers. "Celib Gadi" near Seoul's Gasan Digital Complex is a co-living facility occupying an entire 20-story building with 386 private rooms, a home gym, shared kitchen and communal lounge. Operated by Woojoo Property Management, an affiliate of Zigbang, the facility has filled up quickly since beginning operations in August 2023. More than 80% of residents are in their 20s and 30s. The case illustrates how the facility has absorbed the live-near-work demand of G Valley, where some 12,000 companies and 140,000 workers are based.
In Gangdong-gu, a different kind of experiment has unfolded. In 2024, Morgan Stanley and Gravity Asset Management purchased unsold urban-lifestyle housing and officetel assets in Gildong, Gangdong-gu for approximately 13.3 billion won, remodeled them, and converted them into "Zwell Homes Life Gangdong," operated by SLP (S Life Platform). The investment vehicle, the Gravity Gangdong Residence Fund, is valued at 20 billion won, with an ownership structure of 97.5% Morgan Stanley and 2.5% SLP. The property comprises 104 urban-lifestyle housing units and 26 officetel units, totaling 130 units. Assets that had failed to sell were revived as rental housing for single-person households. Add to this the case of global private equity firm KKR, which together with We Bri Living acquired The State Sunyu Hotel in Yangpyeong-dong, Yeongdeungpo-gu, and converted it into co-living rental housing, and it becomes even clearer where this market is headed.
The officetels that co-living operations primarily utilize are not classified as housing. They are subject to a 4.6% acquisition tax rather than 12%, and a 70% LTV applies to non-residential mortgage loans. Even within the same rental business, the cost structure differs dramatically depending on which asset type is involved.
Co-living operators also face a dilemma. If they register, they can receive an 85% acquisition tax reduction, but this comes with a 10-year mandatory rental period and a 5% rent increase cap. These conditions are fundamentally incompatible with a model whose strength lies in "short-term, flexible leasing." A structure that bundles benefits and obligations together forces operators into uncomfortable choices.
Discussions on institutional improvement converge on three directions. First, consistently operating the long-term rental benefits that already exist. The complaint that it is difficult to plan 10 years ahead because systems have been repeatedly abolished and revived with each administration is not a stale grievance. Before creating new benefits, enhancing the predictability of existing ones should come first.
Second, differentiating obligations by asset type and operating model. It is time to examine whether imposing the same obligations on short-term co-living and long-term rental housing is reasonable.
Third, granting loan exceptions when empty officetels or hotels are converted into rental housing. As the Gangdong-gu case demonstrates, this is also the most realistic path for connecting dormant urban assets to housing supply.
The rapid growth of co-living is a signal. The market is silently revealing the scale of suppressed demand. It is time for policy makers to consider what kind of supply structure should absorb that demand, and where to strike the balance between curbing speculation and nurturing the rental industry.
