National Apartment Jeonse Rate Falls Below 70%... First Time in 5 Years and 3 Months

[Asia Economy Reporter Yuri Kim] The nationwide apartment jeonse price-to-sale price ratio has fallen below 70% for the first time in over five years. The jeonse price compared to the sale price of apartments in Seoul dropped to half, marking the lowest level in more than seven years.

According to the February monthly housing price trend released by KB Kookmin Bank Live On on the 27th, the nationwide apartment jeonse price-to-sale price ratio was 69.8%. This is a 0.2 percentage point decrease from last month (70%). The jeonse price-to-sale price ratio, which is the ratio of jeonse price to sale price, has fallen below 70% for the first time in 5 years and 3 months since recording 69.6% in November 2014.

The weakening of the jeonse price-to-sale price ratio is a result of the recent sharp rise in sale prices centered on some regions. This year, nationwide apartment jeonse prices rose by 0.20% in January and 0.22% in February, while sale prices increased by 0.38% and 0.46%, respectively.

Due to the strong nationwide apartment sale prices, the 5-quintile ratio, which divides the average of the top 20% (5th quintile) by the average of the bottom 20% (1st quintile), recorded 7.1 times this month. This is the largest gap since November 2010 (7.1 times).

In particular, the jeonse price-to-sale price ratio for Seoul apartments was 55.6%, the lowest in over seven years since January 2013 (55.2%). Although the sale price of Seoul apartments rose by 0.51% this month, the jeonse price only increased by 0.26%. The median sale price of Seoul apartments also rose 3.93% from 947.98 million KRW last month to 912.16 million KRW. However, the median jeonse price only increased by 0.30%, from 446.43 million KRW in January to 447.78 million KRW in February.

In Seoul, Yongsan-gu had the lowest jeonse price-to-sale price ratio at 46.5%. Gangnam-gu (47.7%), Songpa-gu (47.7%), and Yeongdeungpo-gu (49.3%) also remained below 50%. This means that the jeonse prices in these areas are less than half of the sale prices.

On the other hand, Jungnang-gu (65.6%) had the highest jeonse price-to-sale price ratio among Seoul’s autonomous districts, approaching the national average. Jung-gu (63.1%), Gangbuk-gu (62.9%), Gwanak-gu (62.7%), and Jongno-gu (62.7%) also maintained relatively high levels.

The jeonse price-to-sale price ratio in Suwon City, where Yeongtong, Jangan, and Gwonsun-gu were recently added as regulated areas, was 69.2%, falling below 70% for the first time in six years since February 2014. Similarly, Manan-gu in Anyang, also designated as a regulated area, recorded an apartment jeonse price-to-sale price ratio of 69.3%, falling below 70% for the first time since August 2014 (69.5%). This is analyzed as a result of investment demand flowing into these areas due to fatigue from the recent surge in Seoul apartments and the government's focused regulations targeting Seoul, which caused sale prices to rise.

This content was produced with the assistance of AI translation services.