Despite Forewarning of Measures, Jeonse Prices Soar... Seoul's Weekly Increase Expands for 4 Consecutive Weeks

Korea Real Estate Board Weekly Apartment Price Trend Announcement
Seoul Jeonse Price Increase Rate 0.14%→0.15%
Instability in Sales and Jeonse Continues Despite Policy Announcement
Government Announces Measures Today... Effects Likely Limited

[Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] Apartment jeonse prices in Seoul and the metropolitan area have been rising sharply every week, with the rate of increase expanding for four consecutive weeks. The government has announced measures to supply 114,000 public rental housing units nationwide over two years to stabilize soaring jeonse prices, but experts analyze that it will not be easy to curb the jeonse crisis in the short term.

According to the weekly apartment price trend data for the third week of November released by the Korea Real Estate Board on the 19th, as of the 16th, apartment jeonse prices in Seoul rose by 0.15% compared to the previous week. The rate of increase has been continuously growing over the past five weeks: '0.08%→0.10%→0.12%→0.14%→0.15%.'

Besides Seoul, the metropolitan area (0.25%→0.26%), provinces (0.29%→0.33%), five major metropolitan cities (0.33%→0.41%), and eight provinces (0.22%→0.24%) all saw larger increases in jeonse prices compared to the previous week. The jeonse crisis is spreading nationwide, not only in Seoul but also in Gyeonggi-do and provincial metropolitan cities.

The Korea Real Estate Board explained the jeonse crisis in Seoul by stating, "Due to strengthened residency requirements and other factors, an overall supply-demand imbalance is emerging," adding, "Prices are rising mainly in areas with good educational and transportation conditions and relatively low-priced complexes."

In Seoul, jeonse prices are rising sharply every week in the Gangnam area, where there is a persistent shortage of listings. Seocho-gu (0.23%), Songpa-gu (0.23%), and Gangdong-gu (0.22%) saw larger increases compared to the previous week, while Gangnam-gu (0.19%), which had experienced a strong upward trend, saw a reduced rate of increase compared to the previous week (0.21%).

Other districts such as Mapo-gu (0.21%), Dongjak-gu (0.20%), Yongsan-gu (0.15%), Seongdong-gu (0.14%), Seongbuk-gu (0.14%), Eunpyeong-gu (0.13%), Yangcheon-gu (0.13%), and Guro-gu (0.13%) also continued to see rising jeonse prices.

In Incheon, the jeonse price increase rate narrowed from 0.61% to 0.52% this week, but prices are still rising sharply mainly in Yeonsu-gu (1.65%). In Gyeonggi-do, the rate of increase expanded from 0.23% to 0.27%. In the non-regulated areas, the "balloon effect" is significant, with Gimpo-si (0.92%) seeing large jeonse price increases mainly in Hangang New Town, areas near subway stations, and newly built complexes.

On the afternoon of the 18th, a view of apartment complexes and multi-family houses from Lotte World Tower Seoul Sky in Songpa-gu, Seoul. (Photo by Yonhap News)

As the jeonse crisis spreads nationwide, the sales market is also showing signs of instability. In Seoul, apartment sale prices rose by only 0.02%, the same as last week, but the metropolitan area (0.15%→0.18%), provinces (0.27%→0.32%), five major metropolitan cities (0.39%→0.48%), and eight provinces (0.16%→0.18%) all saw larger increases.

In Seoul, sale prices continued to rise mainly in subway station areas with good transportation conditions and some mid-to-low priced complexes under 900 million KRW, while high-priced complexes remained on the sidelines due to holding tax burdens and other factors.

Gangnam-gu (0.00%) and Seocho-gu (0.00%) maintained a flat trend, while Songpa-gu (0.01%) and Gangdong-gu (0.02%) rose slightly compared to the previous week. Jongno-gu (0.04%), Jung-gu (0.04%), Jungnang-gu (0.03%), and Gwanak-gu (0.03%) saw increases mainly in mid-to-low priced complexes.

In Gyeonggi-do, the upward trend continued mainly in non-regulated areas, expanding the rate of increase from 0.23% to 0.28%. In particular, Gimpo-si (2.73%) saw significant rises mainly in relatively affordable Janggi and Bukbyeon-dong and newly built areas in Hangang New Town.

Paju-si (0.78%) rose mainly in Unjeong New Town, where there is anticipation for the extension of Line 3, and upward trends continued in Ilsandong-gu (0.36%) and Seo-gu (0.31%) of Goyang-si, Namyangju-si (0.30%), and Uijeongbu-si (0.24%).

The government announced its 24th measure on the same day to stabilize the unstable sales and jeonse markets. The core of the plan is to supply 114,000 public rental housing units nationwide, including 70,000 units in the metropolitan area, by 2022. More than 40% of the total volume is expected to be released by the first half of next year.

Although not included in this measure, the government is also considering designating some provincial metropolitan cities and parts of the metropolitan area, where house prices are rising sharply, as regulated areas. Currently, the proposal to designate Haeundae, Suyeong, Dongnae, Yeonje, and Nam-gu in Busan Metropolitan City, Suseong-gu in Daegu Metropolitan City, and parts of Gimpo-si in Gyeonggi-do (Tongjin-eup, Wolgot-myeon, Haseong-myeon, Daegot-myeon, etc.) as adjustment target areas has been submitted to the Housing Policy Deliberation Committee.

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