Jeonse Instability, Shift to Sales...? Seoul Apartment Prices See Larger Increase

Apartment Price Trends in the First Week of November by Korea Appraisal Board
Seoul Jeonse and Sale Prices Both Increase Significantly
Jeonse Instability Spreads to the Sales Market

The property listings section is completely empty at a real estate office located in a shopping area within an apartment complex in Jamsil, Songpa-gu, Seoul. (Photo by Yonhap News)

[Asia Economy Reporter Moon Jiwon] The rate of increase in apartment sale and jeonse prices in Seoul expanded further this week.

Since the implementation of the Lease Protection Act, the jeonse shortage has spread, and the sales market, which had been stabilizing, is gradually becoming unstable. This is interpreted as a result of the growing perception that it is better to buy mid-to-low-priced apartments than to bear the sharply rising jeonse deposit.

According to the weekly apartment price trend for the first week of November announced by the Korea Real Estate Board on the 5th, as of the 2nd, the jeonse price of apartments in Seoul rose by 0.12% compared to the previous week. In Seoul, the jeonse price increase rate has been growing over the past three weeks: 0.08% → 0.10% → 0.12%.

The Korea Real Estate Board explained, "Due to low interest rates, the right to request contract renewal, waiting demand for subscription, strengthened residency requirements, and the influence of autumn moving demand, the shortage of listings continues, and jeonse prices are rising mainly in major complexes in school districts and areas near subway stations in Gangnam and Gangbuk areas."

In Seoul, the rise in jeonse prices was particularly noticeable in the Gangnam area. Amid the continued shortage of listings since the implementation of the Lease Protection Act, Songpa-gu (0.21%), Seocho-gu (0.20%), Gangnam-gu (0.19%), and Gangdong-gu (0.18%) all saw relatively significant increases.

In Gyeonggi-do, apartment jeonse prices rose by 0.24%, the same as last week. Significant increases were seen in Goyang Deogyang-gu (0.42%), Uijeongbu-si (0.38%), Gwangmyeong-si (0.37%), and Goyang Ilsandong-gu (0.36%), while Yeoju and Paju-si (-0.01%) continued to decline mainly in older complexes.

(Photo by Yonhap News)

Seoul apartment sale prices rose by 0.02% this week, an increase from last week's 0.01%. The Seoul sales market had maintained a 0.01% increase rate for 10 consecutive weeks since August 24, but the rate of increase slightly expanded this week.

High-priced reconstruction complexes in the Gangnam area showed a wait-and-see stance due to holding tax burdens and declined, but prices rose in other mid-to-low-priced complexes. Industry experts analyze that due to the recent shortage of jeonse supply and rising deposits, some jeonse demand is shifting to mid-to-low-priced sales demand.

In fact, Gangnam-gu (-0.01%), where high-priced complexes are concentrated, continued to see asking price declines mainly in reconstruction complexes, and some new buildings also saw price drops. Seocho-gu and Gangdong-gu (0.00%) maintained a steady trend. Songpa-gu (0.01%) rose mainly in small-to-medium-sized units in Munjeong and Geoyeo-dong.

However, Gwanak-gu (0.03%), which has many mid-to-low-priced complexes, steadily rose mainly in Sillim and Bongcheon-dong, and Geumcheon-gu (0.02%) rose steadily mainly in some older large complexes in Siheung-dong. In particular, Jungnang-gu rose by 0.08% this week, significantly expanding from last week's 0.03%.

Not only Seoul but also sales markets in Gyeonggi-do and other provinces are showing unstable signs.

In Incheon, apartment sale price increase rates expanded from 0.12% last week to 0.15% this week. Yeonsu-gu (0.21%), Michuhol-gu (0.19%), Bupyeong-gu (0.17%), and Gyeyang-gu (0.15%) all rose mainly in complexes with good residential conditions.

Gyeonggi-do also rose by 0.23% this week, an increase from last week's 0.16%. The "balloon effect" in non-regulated areas is concentrating buying demand, and the rise expectation in Gimpo-si (1.94%) continues, with significant increases also in Goyang Deogyang-gu (0.37%) and Paju-si (0.37%).

Sejong (0.24%), where the administrative capital relocation issue is driving the upward trend, continues to see house price increases, but generally shows a wait-and-see stance due to the gap between desired selling and buying prices and fatigue from rapid price rises.

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