"Fewer Listings, Rising Prices"... Jeonse Crisis Spreads to the Seoul Metropolitan Area

[Asia Economy Reporter Yuri Kim] "There is a severe shortage of jeonse listings. These days, the landlord sets the price." (A real estate agency in Geumcheon-gu, Seoul)

As the autumn moving season approaches, the jeonse crisis is intensifying. The average jeonse price for apartments in Seoul has surpassed 500 million KRW, causing prices to soar and listings to disappear, with both price and supply-demand indicators continuing to trend upward. The relatively smaller increases in Gyeonggi and Incheon are also becoming significant. Experts analyze that this phenomenon, which has become prominent since the implementation of the three lease laws including the Jeonse and Monthly Rent Cap System and the Lease Renewal Request Right System, is expected to continue for the time being.

According to KB Real Estate Live On on the 28th, the jeonse price for apartments in Seoul this week (as of August 24) rose by 0.40% compared to the previous week, exceeding last week's increase of 0.38%. The upward trend continued regardless of Gangbuk or Gangnam areas. The highest increases were seen in ▲Gangbuk-gu 1.46%, ▲Songpa-gu 0.76%, ▲Guro-gu 0.72%, ▲Gwangjin-gu 0.71%, and ▲Seongdong-gu 0.61%. The Seoul Jeonse Price Outlook Index for August monthly data was 140.2, the highest since the survey began in 2016. A value above 100 indicates a higher proportion of price increases.

The metropolitan area including Gyeonggi and Incheon also continues to rise. The jeonse price increase rate for apartments in Gyeonggi has been 0.26% for three consecutive weeks. Since June, it has been rising by more than 0.1% weekly. The highest increases were in ▲Suji-gu, Yongin 0.65%, ▲Gwangmyeong 0.56%, ▲Danwon-gu, Ansan 0.51%, ▲Dongan-gu, Anyang 0.51%, and ▲Paldal-gu, Suwon 0.48%. In Incheon, the increase rate expanded to 0.26% from last week's 0.05%. In Incheon, ▲Seo-gu 0.90%, ▲Yeonsu-gu 0.24%, and ▲Bupyeong-gu 0.24% saw increases.

The Jeonse Supply-Demand Index, which gauges supply shortages, also continues to rise. This week, Seoul's Jeonse Supply-Demand Index recorded 190.1. Since exceeding 180 in July, it has shown a continuous upward trend, surpassing 190. Both Gangbuk at 189.9 and Gangnam at 190.3 indicate that the supply shortage has intensified regardless of region. On a monthly basis, warning signs of supply shortages are also sounding. The August monthly data shows Seoul's Jeonse Supply-Demand Index at 185.4, the highest since October 2015 (193.1).

The average jeonse price for apartments in Seoul has also exceeded 500 million KRW. As of August, it reached 510.11 million KRW, the highest since statistics began in June 2011. Compared to a year ago (465.41 million KRW), it rose by 44.7 million KRW (9.6%). The average jeonse price for apartments south of the Han River increased by 10.2% (55.03 million KRW) over the year. North of the Han River, it rose by 8.9% (33.57 million KRW). The increase accelerated from June, when the three lease laws including the Jeonse and Monthly Rent Cap System and Lease Renewal Request Right System were actively discussed. This year, the average jeonse price for apartments in Seoul rose by 1 to 3 million KRW monthly, but jumped by 4.92 million KRW in June, 7.74 million KRW in July, and 10.89 million KRW in August.

In the Korea Appraisal Board survey, which tends to be more conservative than the private sector, Seoul's jeonse prices have risen for 61 consecutive weeks. This week (as of the 24th), Seoul apartment jeonse prices rose by 0.11%. Although this is 0.01 percentage points lower than last week's 0.12%, the high upward trend continues. Gyeonggi also maintained a high increase rate with 0.22% this week following 0.23% last week.

Experts expect this trend to intensify as the autumn moving season begins. Byungcheol Lim, Senior Researcher at Real Estate 114, said, "The jeonse market in the metropolitan area continues to rise due to a shortage of listings. As the autumn moving season approaches, the jeonse shortage caused by the lack of listings is likely to worsen."

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