What is the average rental yield in Daejeon?

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A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

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What's the current average rental yield in Daejeon by property type?

As of September 2025, Daejeon's residential property market delivers varying yields depending on property type and location.

Apartments generate the most consistent returns, with gross yields averaging 3-4% citywide. Smaller central units near universities in Yuseong-gu often achieve slightly higher yields of 4-5%, while larger family apartments in Seo-gu maintain stable yields within the same 3-4% range. These properties attract professional and family tenants who provide steady rental income.

Officetels offer some of the highest yields in Daejeon, ranging from 3-5% gross. Units located in business zones and near tech hubs command premium yields, as they attract single professionals and students who prefer flexible rental arrangements. The combination of strong demand and limited supply in prime locations drives these higher returns.

Villas and row houses typically deliver lower yields of 2-3%, unless they're positioned in highly sought-after family neighborhoods. These properties face lower appreciation potential compared to apartments and officetels, making them less attractive for yield-focused investors.

Short-term rental properties, including Airbnb and co-living spaces, can achieve gross yields up to 6% when well-managed and located in central districts. However, these require more hands-on management and face stricter regulatory oversight, which can impact overall profitability.

How do yields vary between central districts and the outskirts?

Central districts consistently outperform peripheral areas in terms of rental yields and tenant demand.

Yuseong-gu, Seo-gu, and Jung-gu form Daejeon's central core where apartments and officetels achieve higher yields. This premium performance stems from strong demand from students attending nearby universities, tech professionals working in the region's innovation hubs, and residents who value proximity to amenities and transportation links. Properties in these areas typically maintain occupancy rates above 95%.

The outskirts, including Dong-gu and peripheral areas of Jung-gu, deliver lower yields of 2-3%. These areas feature older housing stock with less demand, resulting in longer vacancy periods and slower appreciation rates. Properties here often require more maintenance and may struggle to attract quality tenants willing to pay premium rents.

New urban renewal zones in previously peripheral areas may improve yield prospects as infrastructure develops and the city expands. Investors should monitor these areas for emerging opportunities, though current yields remain below central district performance.

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What's the typical rent for different property sizes?

Daejeon's rental market shows clear pricing tiers based on property size and type, with strong demand across all segments.

How do purchase prices and transaction costs affect net yields?

Purchase prices and associated costs significantly impact your actual investment returns in Daejeon's property market.

The average purchase price sits at ₩5.2 million per square meter, meaning a modern 84㎡ apartment in central districts costs approximately ₩686 million. This baseline price varies significantly based on location, building age, and amenities, with premium properties commanding substantial premiums.

Transaction costs add 2.2-14.1% to your total investment. Acquisition tax ranges from 1-12% of property value, while agent and legal fees typically add 0.5-1%. Registration costs contribute another 0.5-1% to your total expenses. These upfront costs immediately reduce your effective yield compared to gross rental income calculations.

Annual ongoing ownership costs consume 2-4% of property value through maintenance and insurance, while property tax ranges from 0.07-5% annually. Higher rates apply to expensive properties, non-resident owners, and second homes. Net yields typically fall 1.5-2% below gross yields after accounting for all costs, taxes, and typical vacancy periods.

For a central apartment generating 4% gross yield, expect approximately 2-3% net yield after all expenses. Cash buyers achieve higher effective yields than mortgaged investors due to eliminated interest payments.

What role do ongoing ownership costs play in reducing returns?

Ongoing ownership costs create a significant drag on rental yields that many investors underestimate when calculating returns.

Maintenance fees for modern apartments typically range from ₩100,000-₩250,000 monthly, with officetels and shared housing facilities generally requiring lower fees. These costs cover building maintenance, security, utilities for common areas, and facility management. Older buildings often have higher maintenance requirements and costs.

Insurance costs approximately ₩20,000-₩40,000 monthly for standard apartments, providing protection against fire, flooding, and liability claims. While relatively modest, this expense adds up over time and directly reduces net rental income.

Property taxes vary dramatically from 0.07-5% annually based on assessed value, property type, and ownership status. Foreign investors and owners of multiple properties face higher tax rates, significantly impacting net yields. Local residents with single properties benefit from preferential tax treatment.

These ongoing costs typically reduce gross yields by 1.5-2 percentage points. A property generating 4% gross yield commonly delivers only 2-2.5% net yield after accounting for all ownership expenses and typical vacancy periods.

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How does financing versus cash purchase change effective yields?

Your financing choice dramatically impacts actual investment returns and cash flow in Daejeon's property market.

Mortgage rates currently range from 3.05-4.15% for standard loans, with loan-to-value ratios up to 70% and sometimes 80% for first-time buyers. For a ₩600 million property with 70% financing over 30 years at 3.5%, monthly payments reach approximately ₩1.89 million. This payment level often exceeds rental income, creating negative monthly cash flow.

Cash buyers enjoy higher effective yields because they avoid interest payments entirely. While leveraged investors may achieve higher total returns if property values appreciate faster than borrowing costs, they also face increased risk and typically negative cash flow during the holding period.

Financing costs reduce net yields by the full interest rate amount. A property generating 4% gross yield with 3.5% mortgage interest delivers only 0.5% net yield before considering other expenses. Most leveraged investors rely on property appreciation rather than rental income for returns.

Cash purchases provide immediate positive cash flow and eliminate refinancing risk, making them more suitable for income-focused investors. Leveraged purchases work better for investors seeking maximum exposure to property appreciation with limited capital.

What are the differences between short-term and long-term rental yields?

Short-term and long-term rental strategies offer distinctly different risk-return profiles in Daejeon's market.

Short-term rentals, including Airbnb and co-living arrangements, can achieve gross yields of 6-8% in prime locations. These higher returns come from charging premium daily or weekly rates, especially during peak business travel periods and university enrollment seasons. However, short-term rentals require significantly more management time, face higher vacancy rates, and encounter stricter regulatory oversight from local authorities.

Long-term monthly rentals and jeonse arrangements deliver more modest gross yields of 3-5%, but provide predictable monthly income with lower vacancy rates. These arrangements prove popular with families and professionals seeking stable housing, creating consistent demand and easier property management. Vacancy periods between tenants typically last only 2-4 weeks in central districts.

Short-term rentals face additional costs including frequent cleaning, utilities, furnishing, and platform fees that can consume 20-30% of gross income. Long-term rentals transfer most utility costs to tenants and require minimal management once occupied.

Regulatory risks favor long-term rentals, as local authorities increasingly restrict short-term rental operations in residential buildings. Long-term arrangements face fewer regulatory challenges and provide more stable investment income.

Who are the main renter profiles and how do they shape demand?

Daejeon's rental market benefits from diverse tenant profiles that create consistent demand across different property types.

1. Students drive strong demand in Yuseong-gu near KAIST and Chungnam University, preferring studios, co-living spaces, and officetels. This segment provides reliable occupancy but may have seasonal turnover patterns.
2. Young professionals working in tech and business hubs seek central apartments and officetels in Jung-gu and Daedeok-gu. They typically pay premium rents for modern amenities and convenient locations.
3. Small families prefer 2-3 bedroom apartments in Seo-gu, Yuseong-gu, and Daedeok-gu near parks, schools, and family amenities. This segment provides the most stable, long-term tenancies.
4. Expatriates and luxury market tenants target detached houses and larger apartments in prime districts, paying premium rents for high-quality accommodations.
5. Tech workers from major companies create consistent demand for quality housing near employment centers, supporting rental growth in specific districts.

This diverse tenant base reduces vacancy risk and supports stable rental income across economic cycles. Properties positioned to serve multiple tenant types maintain higher occupancy rates and more stable yields.

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 vacancy rates by property type and district?

Vacancy rates in Daejeon remain generally low, especially for modern properties in central districts, though older stock and peripheral areas experience higher turnover.

Central districts maintain vacancy rates below 5% for well-maintained family apartments in Seo-gu and Yuseong-gu. These areas benefit from consistent demand from professionals and families who value stability and are willing to pay market rents for quality housing. Properties near universities and tech centers rarely experience extended vacancy periods.

Co-living spaces, officetels, and smaller apartments face higher turnover due to more transient tenant profiles. Students and young professionals change housing more frequently, creating 2-3 week vacancy periods between tenants even in prime locations. However, strong demand ensures these units re-rent quickly at market rates.

Peripheral areas and older properties experience longer vacancy periods, sometimes extending 1-2 months between tenants. These properties often require rent concessions or property improvements to attract quality tenants, reducing effective yields compared to prime central locations.

Seasonal patterns affect vacancy rates, with university-area properties experiencing higher turnover during academic transitions in March and September. Business-focused properties maintain more consistent occupancy throughout the year.

What are the smartest property choices for stable rental income?

The most reliable rental income comes from properties positioned to serve Daejeon's strongest tenant segments with consistent demand.

Central district apartments in Yuseong-gu and Seo-gu offer the most resilient investment option. These properties deliver stable yields, attract diverse tenant profiles, and maintain high occupancy rates throughout economic cycles. Their proximity to employment centers, universities, and amenities ensures consistent rental demand and capital appreciation potential.

Officetels near tech companies and universities provide excellent yield potential with flexible rental arrangements. Young professionals and students appreciate the modern amenities and convenient locations, supporting premium rents and quick re-leasing between tenants. These properties typically maintain occupancy rates above 90%.

New developments in urban renewal areas offer potential for both stable income and capital appreciation as infrastructure improvements complete. Early investment in these areas can capture both current yields and future growth as neighborhoods develop and attract additional amenities.

Properties serving family tenants in established neighborhoods provide the most stable, long-term rental income with minimal management requirements. While yields may be slightly lower, the reduced vacancy and turnover costs often result in superior net returns.

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How have rents and yields changed over recent years?

Daejeon's rental market has experienced significant growth over the past five years, driven by economic development and population growth.

Property prices have surged 35% since 2020, with particularly strong 10.7% year-over-year growth from 2024 to 2025. Central districts experienced the most dramatic price increases as demand from tech workers and students intensified. This rapid appreciation has attracted investor attention but also raised affordability concerns.

Rental rates have grown more modestly, with approximately 3% year-over-year increases for apartments. This growth rate reflects steady demand from tech workers and students, but has been insufficient to keep pace with property price appreciation in many areas. The result has been slight compression in gross yields for properties purchased at peak prices.

Net yields have remained relatively stable despite rising costs, as rent growth has slightly outpaced increases in maintenance fees and property taxes. However, properties purchased at current market prices face lower yields than those acquired before the recent price surge.

The yield compression primarily affects new investors, while existing property owners have benefited from both capital appreciation and steady rental income growth. This dynamic makes property selection and timing increasingly important for yield-focused investors.

What's the forecast for yields in the coming years?

Daejeon's rental yield outlook remains positive compared to other major South Korean cities, supported by continued economic growth and limited new supply.

One-year forecasts suggest modest growth of 2-3% in both rents and property values, with stable or slightly rising yields for central apartments and officetels. Limited new apartment supply supports continued rental demand, while tech sector expansion drives employment growth and housing demand.

Five-year projections indicate cumulative growth of 6-9% in property values, supported by urban renewal projects, tech industry expansion, and infrastructure improvements. These fundamentals should sustain rental demand and support yield stability even as the market matures.

Ten-year forecasts anticipate sustained moderate growth in both rents and property values, positioning Daejeon favorably compared to similar-sized cities like Daegu and Gwangju. While these comparable cities show similar yields of 3-4%, Daejeon's stronger economic fundamentals and tech sector presence support superior long-term appreciation potential.

The combination of limited new supply, continued tech sector growth, and urban development initiatives creates a favorable environment for sustained rental yields. Investors can expect Daejeon to outperform comparable cities in both yield stability and capital appreciation over the next decade.

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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.

Sources

1. Daejeon Real Estate Market Trends
2. Daejeon Property Analysis
3. Airbtics Daejeon Revenue Report
4. Daejeon Real Estate Trends
5. Daejeon Real Estate Market
6. Expatistan Daejeon Cost of Living
7. Rentola Daejeon Listings
8. Average Rent South Korea
9. South Korea Apartment Prices per Sqm
10. South Korea Housing Market Forecast