Blocking Sales Pushed Rents Up — One Year of Permit Zones in Seoul

The average Seoul apartment now costs more than 1.7 billion won — roughly $1.2 million. That's an average across the whole city, not a median, and not a Gangnam-only number.

It has been exactly one year since the policy meant to cool those prices took effect: land transaction permit zones, a designation most people here just call the permit rule.

The logic is simple enough. Remove speculative demand and prices should settle. A year on, most assessments say prices did not settle. What stands out more is what happened to rents.

Why did jeonse deposits rise?

The owner-occupancy rule is the key. If you buy, you have to move in — which also means you cannot offer that apartment on the jeonse market. Homes that would normally have become rental listings simply never appear.

Demand for rentals stayed roughly the same while listings shrank. Renters crowded into what was left, and deposits climbed. The pressure pushed off the sales market moved next door into rentals.

To be fair, this isn't only about permit zones. Rental markets move with interest rates, new-build completions and mortgage rules too. Pinning the entire rise on one policy would be a stretch. But structurally, the rule clearly works in the direction of fewer rental listings.

Who feels it most?

Renters. Anyone who already owns several properties has somewhere to live. The household that has to find tens of millions of won more in deposit money is the one renting in Seoul because they need to live there. That's the core criticism: a rule aimed at speculators landed hardest on ordinary tenants.

Some practitioners argue for lifting the designation selectively — by neighborhood rather than by entire district. The Ministry of Land says it will watch conditions before deciding whether to extend.

A year in, the average price is past 1.7 billion won and deposits rose faster still. A decision on extending the rule is coming, and whichever way it goes, somebody ends up worse off than today.