Analysis: Gen-Z disaffection to increase as foreign investors enter monthly rental market

With foreign investors driving up competition in the rental sector, the dream of home ownership is slipping further out of reach for many.

Significance. Foreign investors are rapidly expanding into South Korea’s monthly rental market, which will exacerbate Gen-Z’s existing frustrations with housing affordability. Traditionally reliant on jeonse—a long-term deposit-based rental system—young Koreans now face rising monthly rents as jeonse options dwindle.

With foreign investors driving up competition in the rental sector, the dream of home ownership is slipping further out of reach for many. This will intensify disaffection among Gen-Z, adding housing insecurity to their growing list of grievances, including stagnant wages and limited career prospects.

Combined, these pressures create fertile ground for increased political polarization and a turn toward extreme politics.

Analysis. South Korea’s housing market is undergoing a significant transformation. Historically, the jeonse system allowed renters to avoid monthly payments by providing a large upfront deposit, which they received back at the end of their contract.

However, a combination of rising property prices, government policy shifts, and financial incentives for landlords has led to the decline of jeonse and the rise of monthly rental agreements. This shift has left young Koreans vulnerable to rising housing costs. Foreign investors, seizing the opportunity for high returns, have further complicated the market by increasing competition and pushing rental prices higher.

As monthly rents continue to rise, young Koreans will find it increasingly difficult to save for home ownership. The entry of foreign investors will accelerate this trend, further distancing Gen-Z from property ownership. South Korea’s historically high home ownership aspirations will likely give way to widespread frustration and resentment.

Gen-Z’s perception of a rigged system, where opportunities are reserved for the wealthy and foreign entities, will fuel growing social unrest. In this environment, young Koreans will likely shift their political support toward fringe and extreme political movements that promise radical change.

Mainstream media reporting has highlighted the rising influence of foreign investors and the affordability crisis in the housing market. However, much of the coverage focuses on short-term price trends and government responses, rather than the long-term social and political consequences. The media has yet to fully explore how the combination of high rents and foreign investor activity could reshape the political landscape by alienating an entire generation.

The growing disaffection among South Korea’s youth will have broader implications for the country’s foreign policy.

Rising political instability fueled by economic grievances could weaken South Korea’s ability to project stability and predictability in the region. A turn toward more extreme political movements could also shift the country’s diplomatic priorities, making it more inward-focused, less aligned with traditional allies, and more open to radical change.

Impact. Gen-Z’s disaffection will grow over the next 12 to 24 months, with rising housing costs and foreign investor activity contributing to increased support for extreme political movements. Diplomatic observers should monitor the youth-driven shift in political sentiment and its role in political processes, including demonstrations and online political action.