Why Korean Rent Is Low

Key Takeaways

• A brand new studio apartment for $600 a month is possible in Korea. Korean rent often remains relatively affordable for several key reasons.
• According to an article on edaily on July 30, 2025, the average Jeonse price for officetels in the Seoul metropolitan area decreased by 0.3% from 192.35 million won ($139,175) to 191.74 million won ($138,733) in June 2025, compared to June 2024. Meanwhile, the average monthly rent (Wolse) rose 2.1%, from 826,000 won ($597) to 843,000 won ($609).

The Jeonse System for a Rent-Free Lease

The most unique system of the Korean housing market is Jeonse (전세).

Instead of paying monthly rent, tenants put down a large lump-sum deposit, often 50 to 80% of the home’s market value.

The Jeonse contract is to live in the unit rent-free for two years.

At the end of the lease, the full deposit is returned.

For landlords, the deposit serves as interest-free capital they can invest elsewhere.

For tenants, it means living without monthly rent. Jeonse is an attractive alternative to high monthly payments.

This system naturally keeps demand for monthly rental units lower, especially among those who can afford Jeonse, and helps stabilize monthly rent prices.

Monthly Rent Feels Too Expensive to Many Koreans

Even when Koreans pay monthly rent, which is called Wolse (월세), the price tends to be lower than in the States.

It’s because many of us consider $1,000 per month too expensive, especially outside of Seoul.

In cities like Busan, Daejeon, or Gwangju, it’s still possible to find clean, modern one-bedroom apartments for $400-700 per month.

While inflation has increased the cost of living, Koreans still think that rent shouldn’t be a major monthly burden. So, prices are set low.

This is especially true for smaller landlords who rent out units in villas, officetels, or single homes.

Government Regulation Called the Jeon/Wolse Sanghanje

To further protect tenants from sudden rent hikes, the Korean government introduced the Jeonwolse Cap System (전월세 상한제) in July 2020.

Article 7 (Requests for Increase or Decrease of Rents)
(1) If the stipulated rent or deposit becomes unreasonable…, the party concerned may request any increase or decrease thereof prospectively. In such cases, no request for an increase shall be made within one year after a lease contract is concluded or the rent or deposit agreed upon is increased.
(2) An increase requested under paragraph (1) shall not exceed 1/20 of the agreed rent or deposit.

Housing Lease Protection Act

Here’s how it works:

• When a tenant renews a contract, the landlord can only raise the rent by up to 5%.
• Tenants also have the right to renew their lease once for an additional 2 years, offering up to 4 years of housing security.
• The cap applies to all types of residential buildings, including apartments and villas.
• However, new tenants are not covered. Landlords are free to set the initial rent.

For example, if your current Jeonse deposit is 100 million won (about $72,355), the landlord can only increase it to 105 million won (about $75,973) when you renew.

The same applies to monthly rent, but 5% each to deposit and rent in this case.

This regulation is designed to limit aggressive rent inflation, while still giving landlords flexibility when units turn over.

Lower Rent Outside Seoul

In cities outside Seoul, rent remains noticeably lower.

This is partly due to lower real estate prices, but also because demand for rentals is less intense, and urban density is lower.

Many younger Koreans live with their families until marriage, and smaller towns often have more housing supply than demand.

Rent in Seoul has crept upward in areas like Gangnam or Mapo, but it’s still cheaper than rent in San Francisco, LA, or NYC.

Conclusion

Korean rent may seem affordable, especially when compared to the skyrocketing rental markets in the U.S.

That’s thanks to a combination of cultural values, the Jeonse system, and government safeguards like the 5% cap rule.

While prices are slowly increasing, Korea still offers one of the more tenant-friendly housing environments.