![An aerial view of the Majang-dong area in Seongdong-gu, Seoul. [Herald DB]](https://wimg.heraldcorp.com/news/cms/2026/08/22/news-p.v1.20250723.d4d42ad64bf7469792e58f8bbd16cf01_P1.png)
As the supply-demand imbalance in Greater Seoul's jeonse and monthly rent market deepens, a publicly supported private rental housing project in a prime Seoul location has drawn hundreds of applicants per unit — the first such subscription in the capital in roughly a year. Analysts say the fierce competition reflects surging demand for affordable new rental units at a time when a severe jeonse shortage is pushing many renters out to Gyeonggi Province. The government, recognizing the strong appetite for stable, long-term housing, plans to expand the supply of publicly supported private rental housing by introducing a new long-term category.
According to the Korea Real Estate Board's subscription platform Cheongyanghome, Seongdong Space — a publicly supported private rental complex in Majang-dong, Seongdong-gu, Seoul — accepted applications from Aug. 12 to 14 for 40 units and drew 5,227 applicants. The average competition ratio reached 130.7 to 1, with the highest ratio for any unit type hitting 243 to 1.
Publicly supported private rental housing is supplied by private developers but operates under government-regulated rent levels and tenant eligibility requirements in exchange for public support. Annual rent increases are capped at 5 percent, and tenants may stay for up to 10 years. The model is widely regarded as a way to ease housing costs for end-users, offering below-market rents with long-term occupancy security.
Seongdong Space, built on lots at 767-7 and 767-8 Majang-dong in Seongdong-gu, is a 40-unit multi-family residential building where tenants can stay for up to 10 years. Units range from 38 to 58 square meters in exclusive use area, catering primarily to small and mid-size households.
The subscription marks the first publicly supported private rental offering in Seoul since September last year — a gap of roughly one year. Analysts say pent-up demand, combined with competitive rent pricing and accessible application conditions, drove the surge in applicants.
Of the 40 units available to households without home ownership, 10 were set aside for newlyweds through special supply, while the remaining 30 were open to general applicants regardless of income or asset level. The relatively low barriers to entry compared with other rental housing programs — and the fact that no housing subscription account was required, with units allocated by lottery — are seen as key factors behind the high competition ratio.
Rents vary by unit type, with a deposit of 150 million won ($108,000) and monthly rents ranging from 520,000 to 950,000 won, placing them at roughly 70 to 80 percent of prevailing market rates. A nearby 44-year-old multi-family unit of 56 square meters is currently listed at a deposit of 50 million won with monthly rent of 1.5 million won. Factoring in a jeonse-to-monthly-rent conversion rate of around 5 percent, analysts say Seongdong Space offers a significant price advantage.
"Competition ratios for publicly supported private rental housing were never this high before, but given how bad the jeonse and monthly rent market has become, subscription numbers explode the moment a unit is priced below market," said Park Ji-min, head of the Wolyong Apartment Subscription Research Institute. "For a 39-square-meter unit, the implied jeonse deposit equivalent works out to around 250 million won — which is extremely cheap relative to market rates."
Seongdong Space's location also appears to have boosted its appeal. The complex sits within walking distance of both Majang Station on subway Line 5 and Sindap Station on Line 2, and offers easy access to major commercial districts such as Seongsu and Wangsimni.
Against this backdrop, the government's Aug. 13 housing rapid-supply plan included a measure to introduce a new 20-year long-term category for publicly supported private rental housing. The plan acknowledges that institutional support has been insufficient to incentivize stable, affordable long-term private rental supply, and sets out to increase that supply through financial support and deregulation of rent rules.
To build a corporate-model long-term rental framework beyond the existing 10-year type, the government plans to create new Korea Housing and Urban Guarantee Corporation (HUG)-backed long-term mortgage products — covering both 10-year and 20-year rental terms — to provide developers with financing throughout the rental period. Under the scheme, HUG would provide public guarantees enabling developers to secure low-interest loans from commercial banks for up to 24 years, combining a construction period of three to four years with a rental operation period of 20 or more years.
For the 20-year rental type, initial rents would be set at 95 percent of market rates, and operators would be allowed to reset rents to 95 percent of market rates upon tenant turnover to ensure rental income. The measure responds to industry complaints that the 5 percent cap applied even at tenant turnover under the 10-year model makes it difficult to generate returns over the operating period.
hwshin@heraldcorp.com
