Gwacheon 'Na Hollo' Jeonse Prices Decline for 17 Consecutive Weeks... What Is Happening in Gwacheon?

March Fourth Week Jeonse Prices -0.18%... 17 Consecutive Weeks of Decline
Down 1.17% in One Year... Only Declining Trend in the Capital Area
Significant Drop in Jeonse Demand Due to Completion of Jisik Information Town Sales
Inventory Accumulation from Supply of Large Complexes with Over 3,000 Households

[Asia Economy Reporter Ryu Tae-min] ‘Is there a solution to the Jeonse and monthly rent market in Gwacheon?’

As the Jeonse and monthly rent market in the metropolitan area shows signs of stabilization, the Jeonse prices of apartments in Gwacheon-si, Gyeonggi-do have been declining for four consecutive months, drawing attention. This is believed to be due to the completion of the Gwacheon Knowledge Information Town pre-sale, which led to the departure of waiting demand for subscription, as well as the successive move-ins to new apartments since the end of last year.

According to the weekly apartment price trend by the Korea Real Estate Board on the 5th, the Jeonse price change rate in Gwacheon-si for the fourth week of March as of the 29th of last month recorded -0.18%. Since it first recorded a negative rate of -0.01% on December 7 last year, it has shown a negative change rate for 17 consecutive weeks.

Continuing the downward trend, it dropped to -0.19% on the 8th, increasing the rate of decline.

The average Jeonse price per 3.3㎡ in Gwacheon-si also fell compared to a year ago. According to the KB Monthly Housing Price Trend, the average Jeonse price per pyeong in Gwacheon-si was 6.78 million KRW as of March this year, down 1.17% from 6.9 million KRW in March last year. Gwacheon is the only area in the metropolitan area where Jeonse prices have fallen during this period. This contrasts with the average Jeonse price in Seoul, which rose by 27.5% during the same period.

Completion of Knowledge Information Town Pre-sale... Significant Reduction in Jeonse Demand

Experts point to ‘supply and demand’ as the cause of the decline in Jeonse prices in Gwacheon-si. Jeonse prices surged as move-ins concentrated ahead of the pre-sale of Gwacheon Knowledge Information Town (8,160 households) starting in 2019, but as the pre-sale neared completion, Jeonse demand decreased. This was because prospective tenants had high Jeonse demand to fulfill the mandatory residence period required to qualify for priority supply in the first subscription rank for the relevant area. In fact, 470,000 people applied for 1,100 households in three complexes of Gwacheon Knowledge Information Town in November last year.

The recent successive move-ins to new apartments also seem to have had an impact. Following the move-in of 1,317 households at Gwacheon Central Park Prugio Summit in December last year and 2,128 households at Gwacheon Weverfield in January this year, a total of 3,445 households began moving in, increasing supply and leading to a decline in Jeonse prices.

The head of A Real Estate Agency in Gilhyeon-dong, Gwacheon, said, “In the first half of last year, there was a lot of Jeonse demand to obtain priority supply qualifications for the area, but recently, as the pre-sale has been completed, demand has significantly decreased,” adding, “In addition, with the continued supply of large complexes, Jeonse listings are accumulating.”

Yeo Kyung-hee, senior researcher at Real Estate 114, said, “In the first half of last year, Jeonse prices temporarily fell as the volume of move-ins in Gwacheon sharply decreased,” and added, “If Jeonse demand returns, prices are likely to recover.”

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