Source: Korea Housing & Urban Guarantee Corporation (HUG), Supreme Court of Korea
Korea’s latest Rent Income Ratio (RIR) and Price Income Ratio (PIR) stood at 15.8% and 26%, respectively, in 2023 (KOSIS). The significant gap between RIR and PIR indicates declining interest in home ownership and a growing preference for renting. This trend suggests that policymakers may more actively address housing affordability, potentially through measures promoting a corporate-led private rental housing market.
Figure 2: Rent Income Ratio (RIR) and Price Income Ratio (PIR)
Source: KOSIS, Numbeo
The growing number of single-person and two-person households has also driven up demand for rental housing. Single-person households now dominate the Korean population, accounting for 36% in 2024 (KOSIS), and have become a key driving force for co-living operators. Despite this rising underlying demand, individuals own and transact most private rental housing in Korea, with a lack of professional, experienced operators. As a result, many operators are now seeking to enter the untapped co-living housing market.
These operators typically offer studio-type units ranging from 16 sqm to 60 sqm, with shared kitchen and laundry facilities. The primary occupiers are younger demographics, including university students. Additionally, foreign residents, whose numbers are also increasing, are key tenants. As they are usually ineligible for Jeonse loans, they rely more on monthly rent systems, making co-living an attractive option.
Furthermore, co-living operators generally offer flexible lease terms, from a few weeks to several years. Some even provide hybrid models allowing extremely short stays of a few days. These furnished accommodations have gained popularity among foreign expats due to their adaptability and convenience.
The shift towards monthly rental housing is also evident in “officetels” a common residential asset type in Korea. Officetels have seen a continuous increase in monthly rents over the last five years, contradicting the trend of plummeting sales prices.
Figure 3: Officetel’s monthly rent index and sales price index
