SEARCHING FOR accommodations is a process that many university students undergo before or even during the school semester—especially for those without preexisting homes in Korea such as foreigners and overseas Koreans. Convenience is a significant factor for students who opt to live near their university campuses. In-campus dormitories are an available option but drawbacks such as shared bathrooms and living spaces, curfews, and high competition paint an unappealing picture for some. As an alternative, students rent homes or ja-chi[1] a mere walking distance from their schools in order to enjoy privacy and comfort absent in dormitories. Rentals are a popular choice for their amenities, but high demand has created significant flaws in the student housing market.

Logistics

   The Seoul metropolitan area registered a monthly average of around 56,169 rental transactions in November, 2021[2]. These transactions dealt with residential units ranging from high-rise apartments to detached houses[3], with common choices for the city’s student population of around 515,000[4] being semi-basement homes, studios, one-bedrooms, and officetels.

   There are around 200,000 semi-basement homes or ban-ji-has in Seoul[5], and while their relatively affordable rates attract a younger market, their depiction in media as decrepit and unsafe solidifies their poor social image.

   Studios or one-rooms—especially in low-rise villas—are the most popular choice for individuals with a student budget. In terms of size, one-rooms vary from 16.5 m² to 33 m². Villas often have a landlord that lives within the building, and utilities and rent are reasonably priced as there are fewer tenants in villas compared to their high-rise counterpart.

   Officetels are an abbreviation of “office” and “hotel.” An officetel is essentially a building that individuals may rent out for either business or residential purposes. As of 2021, there are 223,375 officetel units occupied by private households in the Seoul metropolitan area[6]. Officetels were originally built as an affordable option for working single-person households, but being newly built plays a part in their high rates.

   Taking these available options into consideration, students can weigh priorities such as budget and location to choose a suitable living space. However, finding an accommodation does not end with choosing a preferred type of home. The process of house-hunting proceeds with real-estate agents that provide options in-line with one’s requirements. Because Korean real-estate is highly competitive and scarce, hopeful tenants likely have to make decisions within the first 24 hours of visiting a property. Contracts and additional documents are often completed the next day and move-ins are allowed in the same week.

   Rental contracts vary in type, but a common type of rent is wol-se. Taken from the word “wol” meaning “month,” wol- se is a monthly rent transaction that most are familiar with. Tenants pay a safety deposit at the beginning of their contract and continue to pay a separate monthly rent fee for the duration of their stay. Safety deposits are returned unless the contract is breached or the property is significantly damaged. Jeon-se is another type of rent where tenants pay a significantly large deposit (about 60-80% of the unit’s worth), and landlords take a monthly interest of that initial deposit. The money is also returned at the end of the tenancy, but at a lower value due to inflation.

Steep expenses

   Prior to the Coronavirus Disease (COVID-19) pandemic, the average rent of studio apartments smaller than 30 ㎡ in Seoul was approximately ₩520,000[7]. This rate varied depending on the district and neighborhood; Jung-gu rentals averaged at ₩630,000 whilst Guro-gu rents were at a low ₩350,000. University neighborhoods offered affordable prices, following the city-average or even going lower. Rentals around Hongik University averaged around ₩520,000 followed by Yonsei University’s ₩490,000, and Korea University’s ₩460,000. These rent rates seem reasonable at a first glance, but there is a string of miscellaneous fees that increase the financial strain.

   Safety deposit fees exist in most, if not all, rental transactions in Korea. These fees average between ₩5-10 million, and are paid as a lump sum instead of as multiple installments. Deposit fees are a heavy burden for students without external support, and even for those with it, the return of the deposit is not guaranteed. Utilities—which includes add-ons such as the building’s maintenance and internet—are often separately calculated from the rent fee. The rates depend on the landlord but can go as high as ₩150,000, and necessities like water and electricity add up to additional bills. Tenants are also charged a one-time service fee by the real-estate agents that suggested the home—paying around ₩200,000 upfront.

   Collectively, the fees average well above a university student’s budget. A 2021 survey on part-time workers revealed that Koreans in their twenties earned an average of ₩7.12 million per month or ₩9,327 per hour[8]. For financially independent students, it could take years to gather the necessary funds to pay for all of the fees.

   In an interview with The Yonsei Annals, Im Na-yeon (Soph., Dept. of Architecture, Sungkyunkwan Univ.) discussed the difficulties of finding a home near her campus. “I did not expect it to be difficult since I was looking around Hyehwa-dong and it is not as popular as Hongdae or Sinchon,” she said before explaining her lack of preparation for house-hunting. Im assumed she could find a home as long as she consulted with a real-estate agent, but even the agent was unsure of how to help her. “He [the real-estate agent] told me that there were homes that fit my rent budget, but not my security deposit budget. I either had to wait or increase my price-range,” she said. Im explained that in her experience, homes with high deposit fees had low rents while homes with low deposit fees had high rents. She wanted to avoid burdening her family, but could not afford the deposit fee on her own. She resorted to receiving partial financial support. Im furthered, “I was fortunate to have people willing to help, but others do not have the same privileges. I would be homeless if I could not find a way to pay up.”

   Despite the high costs, housing fees in university districts saw a decrease due to COVID-19. Continuous online classes in accordance with government restrictions resulted in a decrease of demand in the student housing market[9]. In 2021, houses around Seoul National University recorded a 6% decrease in monthly rent rates—averaging at ₩340,000—whilst the area around Kyung Hee University recorded a 5% decreased rate of ₩420,000[7].

High competition

   Starting this year, most universities in the country have begun to re-integrate offline classes. The sharp influx of demand in “desirable” neighborhoods has led to a  low supply in the student housing market. Despite the thousands of available rentals in Seoul, homes are taken as soon as they are released to the public. A 2016 survey found that 48% of university students in Korea live independently. Within that bracket, 16.2% of them reside in private homes[10]. 16.2% of a national student population of about 1.94 million[3] is roughly 314,280 people—a high number considering the fixed amount of available accommodations.

   Linara Makhatova (Soph., Dept. of Business Admin., Yonsei Univ.) expressed her frustration with the lack of available homes in the city. Makhatova began searching for homes in late August, almost two weeks before the start of the 2022-2 semester. Within four days, she was able to sign the contract for her home and move in, but not without any difficulties. “It was extremely difficult to find a suitable home. I just got lucky,” she said. Makhatova called several dozen real-estate agencies and searched for hours on the internet. She went over hundreds of apartment listings on real-estate websites such as Zig-bang and Da-bang, many of which were already contracted by the time she called the designated number. “The listing would only be up for a couple of hours but when I would call, they’d say that the home was taken. It was so frustrating,” she added before explaining the reason behind her urgency, “I assumed the house-hunting process would go by quickly, but every day that passed by was a failure. I got more and more fearful that I would not have a place to stay.”

   Makhatova was able to find her home through what she considers “pure luck.” She happened to open Zig-bang on a Thursday morning when a new listing had just gone up seconds before. Makhatova did not have high expectations as she had already been disappointed in the past, but to her surprise, the home matched all of her requirements and was available for viewing. She was able to complete the paperwork and begin her tenancy the very next day.

Biases against foreigners

   The troubles of house-hunting can be experienced by all, but there is a specific hurdle only international students encounter. Pia de Ramos (Sr., Dept. of Political Science & Int. Relations, Ewha Womans Univ.) discussed her experience as a foreigner searching for accommodation in Seoul. She began house-hunting right before her sophomore year and was new to the housing market of South Korea. She said, “I have an accent when I speak Korean so the first thing real-estate agents would ask is, ‘Are you a foreigner?’” De Ramos would inquire agents about specific units, but some would blatantly respond that the landlord did not accept foreigners whilst others would not reply back at all. She recalled several instances when she was introduced to landlords, “They always asked where I was from. Whenever I said the Philippines, I could see their demeanor change.” De Ramos claimed that landlords preferred certain kinds of foreigners over others, saying, “If a European or American wanted the same apartment that I did, I would not be able to get it.” She said that landlords would often doubt if she could afford the unit, and would ask personal questions about her upbringing and family. De Ramos grew conscious of her own identity and began to dread questions about her nationality. “I just wanted a place to live at that point so the questions did not even anger me,” she explained before adding, “One time, a landlord for a house that I was interested in said that she would increase the rent by ₩50,000 only because I was a foreigner. I just laughed it off and left the house.”

   When asked why landlords hold obvious biases against foreigners, de Ramos speculated that it may be due to the fear of the “unknown” many landlords have regarding international students. “I may understand them, but that does not mean I sympathize with them,” de Ramos concluded. These kinda of biases may have come from the negative coverage of real-estate transactions by foreigners in recent years. There has been a visible uptick in property transactions for foreigners in Korea—correlated to the rising international population in the country. Between 2017 and 2021, these transactions increased by 34%, but problems arose with the suspicion of illegal dealings that included false prices, identity theft, and unauthorized cross-border fund exchanges[11]. These infringements on the already-vulnerable state of the domestic housing market have caused public outcry, and government bodies such as the Korea Customs Service and the Bank of Korea have begun organized crack-downs on these transactions[12].

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   Finding a home as a student in Seoul is a difficult experience that may require persistence and patience. The complicated logistics of the housing market are challenging to navigate, and more hurdles develop as one progresses. The low supply of available accommodations may explain their high costs, but the returns are not nearly enough to justify the fees. The answer to whether or not the student housing market will improve or worsen through time remains ambiguous.

[1] Ja-chi: Living alone

[2] Seoul Metropolitan Government

[3] Statista

[4] Study Abroad Aide

[5] Statistics Korea

[6] Korean Statistical Information Service

[7] Da-bang

[8] Al-ba-mon

[9] The Korea Economic Daily

[10] 20s LAB

[11] Korea Joongang Daily

[12] The Korea Herald