Seoul’s Student Housing Gap

Housing is likely to have a role in deciding which destinations can sustain that growth, and in Seoul, as with many cities, it presents a challenge. This imbalance between supply and demand is one of the factors underpinning growing institutional investment in student housing across APAC. Only 10.7% of the city's international undergraduates were housed in university dormitories in 2025, leaving most to compete for small studios in a private rental market already under pressure.⁷ 

Based on existing provision, we estimate that around 56,000 international degree students in Seoul already need housing outside university dormitories, rising to around 65,000 by 2028.⁸ Most are absorbed by a fragmented market of small landlords, large deposits and short supply, which is where professionally managed Co-living and Purpose-Built Student Accommodation (PBSA) can add most. 

An Estimated 56,000 Students Without A University Bed

We estimate the shortfall by comparing international degree students, undergraduate and postgraduate, with the number housed in university dormitories. Seoul's campus-based institutions hosted around 62,900 international degree students in April 2026,⁹ while Seoul's universities provide around 60,900 dormitory beds for 461,800 enrolled students, or one bed for every 7.6 students.¹⁰ Applying the take-up rate observed among international undergraduates to all international degree students leaves around 56,200 who must find accommodation in the private market.¹¹ 

The gap is widening. International student growth at Seoul's 2022 to 2026 trend of 6.5% a year takes the shortfall to around 64,700 by April 2028, before accounting for new dormitory supply, with a range of roughly 61,000 to 65,000 depending on how many postgraduates are housed on campus.¹² The estimate is conservative, excluding more than 31,000 students on language and other short programmes.¹³ The dormitory pipeline offers little relief: around 2,300 net new university and public beds are due by 2028, led by a 1,000-bed public dormitory at SeoulTech and a 595-bed joint dormitory in Yongsan, and even if every one went to international students the 2028 shortfall would remain above 62,000.¹⁴ 

A private market with little room to absorb them 

Students outside university housing are entering a rental market that is tightening. Monthly rents across all Seoul housing rose around 7.6% in the year to August 2026, taking the average above KRW 1.3 million for the first time.¹⁵ Studio rents near the city's ten main universities rose 7.7% in the year to July to KRW 625,000.¹⁶ Monthly rent now accounts for 72% of leases in Seoul's non-apartment market, where most students live.¹⁷  

New supply offers little relief. Seoul housing completions, four-fifths of them apartments, fell 52% year on year in the first half of 2026,¹⁸ while completions of officetels, the small studio buildings many students rent, fell to around 4,900 in 2025, a quarter of their five-year average.¹⁹ Starts of non-apartment homes have begun to recover but from a low base and too late to help the next few intakes.²⁰   

Deposits are a competitive disadvantage 

Seoul stands out for the large deposits required even for monthly rentals, rooted in the jeonse system. A typical KRW 10 million studio deposit is equivalent to around 16 months’ rent,²¹ compared with the one to three months conventionally required in Singapore and Hong Kong.²² In London and Sydney, deposits are capped by law at five weeks' and four weeks' rent respectively.²³ For students, particularly those from less affluent households, raising this sum can present a significant barrier to accessing accommodation, constraining housing choices even where monthly rents are affordable. Students can pay heavily to avoid it. In one reported case near Hanyang University, an international student cut the deposit from KRW 10 million to KRW 4 million in exchange for KRW 100,000 more a month, effectively paying an additional 14% rent over the year.²⁴ 

Sorim Jie, Managing Director, Investment Advisory, Seoul "For most international students the monthly rent is manageable. It is the deposit that is a major hurdle for them. Operators offering furnished rooms without a large lump sum are meeting demand the traditional market was not built to serve."

Capital is ready to follow the students 

Institutional capital is looking for exactly this kind of exposure. Our 2026 APAC Living Investor Survey drew 41 institutional respondents representing around US$33 billion of intended five-year Living capital deployment across the region. Some institutional capital is investing into the student demand theme in Seoul. Invesco recently announced a student housing platform with local operator PCP Standard, initially comprising five properties near Korea University, expected to deliver more than 400 beds from early 2027. Other examples are Morgan Stanley's officetel purchase in Anam-dong, beside Korea University, and Nuveen's KRW 22.5 billion acquisition with Weave Living of a 62-unit building in Dongdaemun.²⁵ In September, Hines committed KRW 100 billion to a 356-unit rental development for students and young workers near four university campuses in Dongdaemun, reported as the first time a global investor has backed Korean rental housing from the land stage. 

Purpose Built Student Accommodation (PBSA) answers the problems students face: low or no deposits, furnished rooms, professional management and new supply where small landlords are not building, although it is unlikely to undercut the one-room market on monthly rent. Co-living models can also help fill this gap and Local Stitch's Nudit Hongdae, which combines housing, workspace and community in the university district around Hongik University, shows the model works locally.²⁶ The scale, and opportunity, for new product that fulfils students’ needs is considerable, with a tenth of the 2028 shortfall equal to around 6,500 beds. 

Hong Kong shows what policy can enable

Hong Kong has shown how policy can help bring that capital forward and contribute to new housing supply. Its Hostels in the City scheme, launched in July 2025, lets owners convert hotels and commercial buildings into student hostels without rezoning, and 41 applications covering around 10,800 beds had been qualified by September 2026.²⁷ This sits alongside around 6,140 campus beds funded through the Hostel Development Fund between 2025 and 2027.²⁸ 

Seoul's policy environment is less enabling. Housing taxes, designed to deter speculative multi-home ownership, can fall on professional landlords: who may face up to triple the normal acquisition tax rate. Rental registration brings relief at the price of 5% annual rent caps and six- to ten-year terms, and loan-to-value ratios for purchase-for-lease are capped across Seoul.²⁹ 

Josh Rose-Nokes Head of APAC Living Research, Singapore "Korea has built an effective framework for attracting students. The next step is a consistent framework for housing them, one that treats professional operators as suppliers of housing rather than as speculators."

A policy opening worth taking 

The government's 13 August supply measures offer an opening. They introduce a privately supplied 20-year rental product with rents at 95% of market and long-term state-backed finance, but its tax treatment is undecided and the first sites are in new towns rather than near universities.³⁰ Extending that framework to student housing and Co-living close to campus, adding a Hong Kong-style conversion route for hotels and officetels and separating professional operators from multi-home investors in the tax code would allow institutional capital to add beds at the scale the shortfall requires. 

Universities are the other natural partner, having used private finance to build dormitories under build-transfer-lease arrangements since 2005.³¹ Seoul has succeeded in attracting international students. Unless housing follows, a shortfall already above 56,000 is likely to become the weakest part of its offer.