Seoul Jeonse Prices Said to "Stabilize"... Rise Stops Declining but Increases for 63 Consecutive Weeks

Hong Nam-ki Deputy Prime Minister "Jeonse Price Increase Rate Slows for 4 Consecutive Weeks"
Increase Rate Halted After 5 Weeks of Slowdown...0.09% Rise
Jeonse Prices Expected to Rise Further Due to 3rd New Town Subscription Waiting List

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is speaking while presiding over the 6th Real Estate Market Inspection Meeting held at the Government Seoul Office Building on the morning of the 8th.
[Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] The Seoul apartment jeonse prices have stopped their five-week streak of narrowing increases. Although the government maintains that the jeonse market is gradually stabilizing, instability continues with jeonse prices soaring mainly in metropolitan area apartments.

Concerns are emerging that the rapid rise in jeonse prices will continue for the time being, as demand waiting for the 3rd New Town subscription is expected to increase.

According to the Korea Real Estate Board's weekly apartment price trend for the first week of September, as of the 7th, Seoul's apartment jeonse prices rose by 0.09%, continuing the upward trend for 63 consecutive weeks since July last year.

Seoul apartment jeonse prices had been decreasing in their rate of increase for four consecutive weeks from 0.17% on August 3rd to 0.14%, 0.12%, 0.11%, and 0.09%, but this week maintained the same rate of increase as last week.

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, said at the 6th Real Estate Market Inspection Ministerial Meeting on the 8th, "The jeonse price increase rate for the 5th week of August also slowed for the fourth consecutive week, showing a level similar to the 3rd week of June," but the slowdown paused just two days later.

The Korea Real Estate Board explained, "Due to the continued relative shortage of listings following the implementation of the Lease 2 Act and strengthened residency requirements on July 31, along with the extension of social distancing to level 2.5 causing a contraction in transaction activity, the rate of increase was maintained last week."

In Seoul, the jeonse price increase rate was high in the Gangnam 4 districts (Gangnam, Seocho, Songpa, Gangdong). Gangdong-gu (0.15%) saw price rises mainly in Gangil, Myeongil, and Sangil-dong; Songpa-gu (0.13%) rose mainly in medium-sized units in Jamsil and Sincheon-dong. Gangnam-gu (0.12%) showed clear increases in Daechi and Dogok-dong, known for good school districts, and Seocho-gu (0.10%) also saw rises in complexes with good locations near subway stations.

Dongjak-gu (0.09%) rose mainly in older complexes in Sadang and Noryangjin-dong, and Yangcheon-gu (0.06%) increased around some new buildings in Sinwol-dong and the Mokdong New Town area undergoing reconstruction. North of the Han River, Mapo-gu (0.15%) saw significant increases, while Jungnang-gu (0.10%) and Eunpyeong-gu (0.08%) also experienced jeonse price rises in mid- to low-priced complexes.

Gyeonggi-do apartment jeonse prices rose by 0.21%, the same as last week. In Yongin Giheung-gu (0.45%), prices rose mainly in Dongbaek and Gugal-dong with good transportation environments, and in Suwon Gwonseon-gu (0.45%), increases were centered on older complexes in the Homaesil district.

The metropolitan area's jeonse market is expected to remain unstable for the time being due to increased demand waiting for subscriptions in the 3rd New Town. As waiting demand remains in the rental market while anticipating the pre-subscription of 60,000 households to be released in the 3rd New Town and others by 2022, it is expected to become even harder to find jeonse listings.

View of Gangbuk-gu and the surrounding apartment complexes from the Buk Seoul Dream Forest Observatory in Gangbuk-gu, Seoul (Photo by Yonhap News)

Seoul apartment sale prices rose by 0.01% this week, maintaining the same rate of increase for three consecutive weeks.

Although overall buying demand has weakened due to the strengthened property tax burden from the July 10 measures and the resurgence of COVID-19, the upward trend continues in some mid- to low-priced complexes.

The Gangnam 4 districts are seeing reduced transactions and continued cautious sentiment due to the property tax burden. Gangnam-gu (0.01%) rose mainly in some new buildings, and Gangdong-gu (0.01%) increased mainly in units priced below 900 million KRW, while Songpa (0.00%) and Seocho-gu (0.00%) remained flat.

Yeongdeungpo-gu (0.02%) rose mainly in some reconstruction complexes and Yeongdeungpo-dong, and Gangseo-gu (0.01%) increased centered on units priced below 900 million KRW in Magok and Hwagok-dong.

Gyeonggi-do apartment sale prices rose by 0.09%, narrowing from 0.11% the previous week. Although the rate of increase is shrinking due to successive government measures, areas affected by redevelopment projects such as Gwangmyeong New Town and districts with high school district demand like Bundang-gu in Seongnam (0.19%) maintained their upward trend.

Paju-si (0.00%) shifted to a flat trend as buying demand decreased mainly in old downtown areas, and Ansan-si (-0.01%) continued to decline as asking prices dropped mainly in reconstruction complexes that had previously seen strong increases.

Sejong City, which has surged due to the administrative capital relocation issue, rose by 0.47%, narrowing from 0.51% the previous week. The Korea Real Estate Board explained, "Although the upward trend continues, the rapid rise in asking prices has caused buying demand to hesitate, resulting in a narrowing of the rate of increase for six consecutive weeks."

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