Hwagok-dong villa market faces severe jeonse shortage

The villa rental market in Hwagok-dong, Seoul, is experiencing a severe shortage of jeonse (lump-sum deposit) listings. Despite previous trauma from large-scale rental fraud in the area, high demand is driving a surge in interest, with some real estate agents reporting waiting lists of over 20 people.

According to the Korea Real Estate Board, the jeonse supply and demand index for multi-unit housing in southwestern Seoul reached 111.4 in June, a level not seen since the 2015–2016 period. This shortage, combined with loan regulations, has led to a ‘new normal’ where approximately 90% of existing jeonse listings have transitioned to ‘ban-jeonse’ (semi-jeonse), where tenants pay a smaller deposit plus monthly rent.

This shift follows the Housing & Urban Guarantee Corporation (HUG) tightening requirements for jeonse guarantee insurance to 126% of the officially announced price. To compensate for the gap, landlords are increasingly charging monthly rents ranging from 200,000 to 500,000 KRW. Consequently, average jeonse prices in southwestern Seoul rose by 3.3% year-on-year, while average monthly rents increased by 5.7%.