Seoul Jeonse Price Ratio Slightly Rises to 59.9%... "Newly Built and High-Priced Sales Prices Decline"

Zigbang Comparison of Jeonse Price Ratios in Q4 Last Year and Q1 This Year Following the 12·16 Real Estate Measures

[Asia Economy Reporter Onyu Lim] In the first quarter, the jeonse-to-sale price ratio (the ratio of jeonse price to sale price) in Seoul rose slightly to 59.9% compared to 56.9% in the fourth quarter of last year when the December 16 real estate measures were announced. Analysts suggest that the impact of falling sale prices of newly built and high-priced apartments is greater than the feared rise in jeonse prices as a side effect of the measures.

According to Zigbang on the 9th, the jeonse-to-sale price ratio in Seoul for the first quarter (January to March) is recorded at 59.9%, a 3 percentage point increase from 56.9% in the fourth quarter of last year. Ham Young-jin, head of Zigbang Big Data Lab, analyzed, "Rather than the influence of jeonse prices, this result appeared as a price adjustment downward mainly in newly built or high-priced apartments and complexes where prices had already risen significantly due to the December 16 measures, and the transaction flow shifted mainly to areas and complexes perceived as relatively affordable."

In particular, the jeonse-to-sale price ratio of newly built apartments rose more than 10 percentage points to 65% from 54.2% in the fourth quarter of last year. Although jeonse prices fell in the first quarter, sale prices also dropped significantly, resulting in a higher jeonse-to-sale price ratio. Ham said, "Before the December 16 measures, sale prices rose mainly in leading apartments in key areas or newly built apartments with good locations, but afterward, the weakness of high-priced apartments led to an increase in the jeonse-to-sale price ratio." For older apartments, transactions proceeded mainly with urgent sales and affordable listings due to price increase burdens, raising the jeonse-to-sale price ratio from 56.9% in the fourth quarter to 59.9% in the first quarter. The adjustment range was relatively smaller compared to newly built apartments.

In Gyeonggi Province as well, the jeonse-to-sale price ratio rose by 3.3 percentage points to 71.5% in the first quarter compared to 68.2% in the fourth quarter. The jeonse-to-sale price ratio for newly built apartments was 68.6% in the first quarter, slightly down from 71.5% in the fourth quarter. Although sale prices were slightly adjusted downward in the first quarter compared to the fourth quarter, the adjustment was not as large as in Seoul. Ham explained, "The downward adjustment in jeonse prices was greater than that in sale prices, causing the jeonse-to-sale price ratio to decline," adding, "It seems that the large supply of new apartment move-ins influenced the jeonse market."

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