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South Korea's rental market in 2025 shows significant variation across cities, with Seoul commanding the highest rents at an average of KRW 1,122,000 monthly, while secondary cities like Gwangju offer more affordable options at KRW 602,000.
As of June 2025, the South Korean rental market continues its shift from traditional jeonse deposits to monthly rent payments, with rental yields ranging from 2-6% depending on property type and location. Seoul dominates the market with the highest demand and prices, but secondary cities often provide better rental yields for investors due to lower purchase costs.
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Seoul leads South Korea's rental market with average monthly rents of KRW 1,122,000, while rental yields vary from 2-6% depending on property type and location.
The market is transitioning from jeonse deposits to monthly rentals, with stronger demand in major cities and better yields often found in secondary locations.
| City | Average Monthly Rent (KRW) | Rental Yield Range |
|---|---|---|
| Seoul | 1,122,000 | 2-6% |
| Gyeonggi | 946,000 | 3-5% |
| Incheon | 807,000 | 3-4% |
| Busan | 613,000 | 3-5% |
| Daegu | 751,000 | 3-4% |
| Daejeon | 701,000 | 3-4% |
| Gwangju | 602,000 | 3-4% |
What's the average rent right now in South Korea by city and region?
Seoul commands the highest rental prices in South Korea with an average monthly rent of KRW 1,122,000 as of June 2025.
Gyeonggi Province follows as the second most expensive region at KRW 946,000 monthly, benefiting from its proximity to Seoul and growing business districts. Incheon rounds out the top three at KRW 807,000, supported by its international airport and port facilities.
Secondary cities offer more affordable rental options, with Busan at KRW 613,000, Gwangju at KRW 602,000, and Daejeon at KRW 701,000 monthly. Daegu sits in the middle range at KRW 751,000, while Ulsan commands KRW 677,000 due to its industrial base. The national average across all regions stands at KRW 778,000 monthly.
Regional rent growth varies significantly, with Incheon leading at +3.8% annual increase, followed by Seoul at +2.7% and Gyeonggi at +2.1%. Some cities like Daegu experienced declines of -2.5%, reflecting local economic conditions and supply dynamics.
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How does rent differ between property types like studios, one-bedrooms, officetels, villas, and apartments?
Studios and one-bedroom apartments deliver the highest rental yields in South Korea, particularly in Seoul where they can achieve up to 6.57% gross yield.
Monthly rents for studios and one-bedrooms typically range from KRW 700,000 to KRW 1,500,000 depending on location and amenities. These smaller units are highly sought after by young professionals and students, creating strong rental demand that supports higher yields compared to larger properties.
Officetels represent a popular middle ground, especially among young professionals, with rental yields typically falling between 3-5%. These mixed-use buildings offer slightly higher yields than standard apartments for smaller units due to their convenience and modern amenities. Monthly rents vary widely based on location and building quality.
Standard apartments remain the most common and in-demand property type across South Korea, though yields are more moderate at 2-4% in prime Seoul areas and 3-5% in secondary cities. Villas, or low-rise residential buildings, generally command lower rents and yields but appeal to families seeking more space at lower price points.
Co-living spaces and serviced apartments can achieve yields of 4-6%, though they require more intensive management and higher operational costs to maintain these returns.
What are the average rental prices per square meter and total, with and without maintenance fees?
Seoul apartments command the highest per-square-meter rental rates in South Korea, with purchase prices averaging KRW 13.4 million per square meter.
| Location/Type | Price per m² (Purchase) | Annual Rent per m² |
|---|---|---|
| Seoul Apartments | KRW 13.4 million | KRW 38,709 (Grade A offices) |
| National Average | KRW 5.76 million | Varies by location |
| Seoul Grade A Offices | N/A | KRW 38,709 |
| Secondary Cities | Below national average | Lower than Seoul |
| Luxury Buildings | Premium pricing | Higher rates |
Maintenance fees add significant costs to rental properties, typically ranging from KRW 1,000 to KRW 3,000 per square meter monthly. Luxury buildings and newer developments command higher maintenance fees due to premium amenities and services.
The national average purchase price sits at KRW 5.76 million per square meter, translating to approximately USD 3,980 at current exchange rates. Regional variations are substantial, with secondary cities offering significantly lower per-square-meter costs for both purchase and rental.
These maintenance fees cover building upkeep, security, utilities for common areas, and amenities like gyms or parking. Tenants should factor these costs into their total rental budget, as they can add 10-20% to the base rent depending on the building's features.
What's the typical monthly cost for landlords including property tax, maintenance, insurance, and mortgage repayments?
South Korean landlords face property taxes ranging from 0.5% to 3.2% of property value annually, with higher rates applied to properties valued over KRW 600 million.
Maintenance fees represent a significant ongoing cost at KRW 1,000 to KRW 3,000 per square meter monthly, which landlords often pass through to tenants. Property insurance varies by coverage and property type but is typically included in operating expense calculations alongside general liability coverage.
Mortgage repayments depend heavily on loan size, interest rates, and repayment terms, making this the most variable cost component for landlords. Current interest rate environments and loan-to-value ratios significantly impact monthly carrying costs.
Net rental yields typically fall 1.5-2% below gross yields after accounting for all landlord costs including taxes, maintenance, insurance, and financing expenses. This means a property showing 4% gross yield might deliver 2-2.5% net return to the owner.
Additional costs may include property management fees for landlords using professional services, vacancy periods between tenants, and periodic maintenance or renovation expenses to maintain rental competitiveness.
How do rental prices and yields compare for short-term rentals like Airbnb vs long-term contracts?
Short-term rentals through platforms like Airbnb in Seoul generate significantly higher yields than long-term contracts, but require more intensive management.
Seoul Airbnb properties achieve median occupancy rates of 80% with average daily rates of KRW 88,132, translating to annual host income of approximately KRW 24 million. These returns often double those available from long-term rental contracts, making them attractive for investors willing to handle higher management demands.
Long-term rental contracts offer more stability with lower gross yields of 2-5% in Seoul and higher percentages in secondary cities. These arrangements provide steady income with minimal vacancy risk and reduced management burden compared to short-term rentals.
However, short-term rentals face increasing regulatory scrutiny and potential restrictions that could impact future profitability. Management costs are also higher due to cleaning, guest communication, and platform fees that can reduce net returns significantly.
The choice between short-term and long-term rental strategies often depends on investor preferences for active management versus passive income, with short-term rentals requiring more hands-on involvement but potentially delivering superior returns in prime locations.
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What are the best-performing neighborhoods for rental yield and rental demand today?
Seoul's central business districts including Gangnam, Jongno, and Mapo show the highest rental demand, though yields are often better in less expensive neighborhoods due to lower purchase prices.
Gangnam district commands premium rents due to its business concentration and prestige, but high property values compress yields for investors. Jongno benefits from government and financial sector employment, maintaining steady rental demand throughout economic cycles.
Mapo district attracts young professionals and tech workers with its modern developments and convenient transportation links. These areas consistently show low vacancy rates and stable rent growth, though purchase prices reflect this demand premium.
In Busan and Incheon, tourist areas and emerging business districts deliver higher yields, particularly for short-term rental strategies. University districts across secondary cities provide stable demand from student populations, though rental rates remain more modest.
Secondary cities near technology parks and industrial zones often produce the best risk-adjusted returns, with yields of 3-5% and growing demand from domestic migration patterns. These locations benefit from economic development while maintaining affordable property values.
What are example rental returns for different property types in Seoul, Busan, and secondary cities?
Seoul delivers varied rental returns depending on property type, with one-bedroom units achieving the highest yields at 6.57% gross return.
| Location/Property Type | Gross Rental Yield | Key Notes |
|---|---|---|
| Seoul Average | 4.31% | Mixed property types |
| Seoul 1-Bedroom | 6.57% | Highest yield category |
| Seoul 2-Bedroom | 3.86% | Lower due to higher prices |
| Seoul Prime Areas | 2-4% | Premium locations |
| Incheon Properties | 3-4% | Stable, may decline with new supply |
| Busan Properties | 3-5% | Higher for Airbnb strategies |
| Officetels | 3-5% | Better yields for smaller units |
| Co-living Spaces | 4-6% | Requires intensive management |
Busan properties typically generate 3-5% gross yields, with higher returns possible through short-term rental strategies in tourist-focused areas. The city's lower property values compared to Seoul allow for better yields despite lower absolute rental rates.
Secondary cities across South Korea often outperform major metropolitan areas with yields in the 3-5% range, benefiting from lower purchase prices while maintaining reasonable rental demand. These markets offer attractive entry points for investors seeking better risk-adjusted returns.
Net yields typically fall 1.5-2% below gross yields after accounting for all ownership costs, making actual investor returns more modest but still competitive with other investment options in the current rate environment.
How have rental prices and yields changed over the last 1 year, 5 years, and 10 years?
As we reach mid-2025, South Korea's rental market shows moderate growth with the national rent index up 1.2% over the past year.
Seoul led regional growth with rental increases of 2.7% annually, while some secondary cities experienced declines, notably Daegu with -2.5% rent growth. This divergence reflects the continued concentration of economic activity and population growth in major metropolitan areas.
Over the past five years, the most significant trend has been the accelerated shift from jeonse (large deposit) contracts to monthly rent payments. This transition has generally stabilized or slightly increased yields in Seoul while creating pressure in some regional markets where traditional jeonse arrangements were more common.
The ten-year view shows substantial price and rent increases in Seoul, though yields have compressed in prime areas due to faster property value appreciation than rent growth. Secondary cities have maintained more stable yield environments due to slower purchase price growth relative to rental income.
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We did some research and made this infographic to help you quickly compare rental yields of the major cities in South Korea versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What are the current vacancy rates and how do they vary by property type and location?
Seoul residential vacancy rates remain extremely low at under 3% for apartments, reflecting strong demand and limited supply in the capital region.
Grade A office space in Seoul shows a 2.6% vacancy rate as of Q1 2025, indicating healthy demand from corporate tenants and limited new supply entering prime locations. This low vacancy environment supports steady rent growth and reliable income for property owners.
Secondary cities experience slightly higher vacancy rates, particularly for non-apartment property types and in areas receiving new supply. Regional markets show more variation based on local economic conditions and development pipelines.
Apartment buildings consistently maintain the lowest vacancy rates across all markets, benefiting from strong demand from both domestic and international tenants. Officetels and mixed-use properties show moderate vacancy rates but generally remain in healthy ranges below 5%.
Areas with significant new construction may experience temporary vacancy increases as supply comes online, though these typically normalize within 6-12 months in markets with strong underlying demand fundamentals.
Who are the typical tenants by segment—students, expats, professionals, families—and what do they typically rent?
Students represent a crucial tenant segment, typically preferring studios, officetels, or shared housing arrangements near universities across South Korea.
Expatriate professionals often choose officetels or serviced apartments in central Seoul or near business hubs, valuing convenience and modern amenities over space efficiency. This segment frequently opts for furnished units and shorter-term leases, making them attractive to landlords despite potentially higher turnover.
Domestic professionals favor officetels and one-bedroom apartments in city centers, prioritizing proximity to work and transportation links. This group forms the core demand for smaller, efficiently designed units that deliver higher rental yields per square meter.
Families typically seek larger apartments or villas in suburban districts with good schools and family amenities. While these properties generate lower yields per square meter, they often provide more stable, longer-term tenancies with lower management requirements.
The growing trend toward smaller household sizes and delayed marriage in South Korea continues to support demand for studio and one-bedroom units, particularly in major metropolitan areas where this demographic shift is most pronounced.
What are the forecasted trends for rents and rental yields over the next 1, 5, and 10 years?
Short-term forecasts for 2026 indicate rental growth of 2-4% in Seoul with more moderate increases elsewhere across South Korea.
The continued shift toward monthly rent payments is expected to accelerate, creating additional demand for rental properties as fewer tenants opt for traditional jeonse arrangements. This trend particularly benefits investors seeking regular income streams rather than large deposit management.
Medium-term prospects through 2030 include increased participation from corporate and institutional landlords, expansion of government affordable housing programs, and stable or slightly rising yields in non-prime areas. Professional property management is likely to become more common as the market matures.
Long-term forecasts through 2035 point to continued urbanization and demographic shifts driving rental housing demand, especially among young adults and expatriate populations. Government policy initiatives aimed at increasing rental supply may moderate rent growth while improving market stability.
Yields are expected to remain moderate with potential upside in emerging districts and secondary cities as infrastructure development and economic growth support rental demand while keeping property acquisition costs manageable for investors.
How does South Korea's rental market compare with other global cities like Tokyo, Taipei, or Berlin in terms of yield and risk?
South Korea offers gross rental yields of 2-6% depending on property type and location, with moderate risk levels and strong tenant demand.
Tokyo provides similar yields of 2-4% but with exceptionally stable market conditions, very low vacancy rates, and high property purchase prices that limit entry opportunities. The Japanese market offers lower volatility but also reduced upside potential compared to South Korea's emerging opportunities.
Taipei yields typically range from 1.5-3% with low risk profiles, but strict rent controls and high property prices significantly compress investor returns. The Taiwanese market offers stability but limited growth prospects for rental income.
Berlin delivers yields of 2-4% but faces substantial regulatory challenges including strict rent controls and extensive tenant protections that increase operational risks for property investors. These regulations can limit rent growth and complicate property management.
South Korea positions itself as a middle ground with reasonable yields, moderate regulatory environment, and growing market sophistication. The ongoing transition from jeonse to monthly rent creates opportunities for investors while government policies generally support property investment within reasonable parameters.
It's something we develop in our South Korea property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
South Korea's rental market in 2025 demonstrates strong fundamentals with Seoul leading pricing and demand while secondary cities often provide superior yields for investors.
The ongoing shift from jeonse to monthly rent payments creates new opportunities for both domestic and international investors seeking regular income streams from South Korean real estate.
Sources
- Global Property Guide - South Korea Price History
- BambooRoutes - South Korea Price Forecasts
- Global Property Guide - South Korea Rental Yields
- BambooRoutes - South Korea Housing Market Forecast
- CBRE - Seoul Market Figures Q1 2025
- BambooRoutes - Seoul Property Taxes and Fees
- Airbtics - Seoul Airbnb Revenue Analysis
- Savills - South Korea Market Research
- Global Banking & Finance - South Korea Real Estate Trends 2025
- BambooRoutes - South Korea Real Estate Market