Metropolitan Area Jeonse Prices Decline Spreads... New Towns Down for the First Time in 20 Months

Budongsan114, Apartment Price Trends in the Seoul Metropolitan Area for the Last Week of March

[Asia Economy Reporter Kim Hyemin] The sharply rising jeonse prices over the past year are showing signs of stabilization. In Seoul, the number of districts where jeonse prices are turning downward is increasing, and in new towns, the average jeonse price recorded a negative change rate for the first time in 1 year and 8 months. However, there are concerns that this trend needs to be observed further to determine if it will continue.

According to Real Estate 114 on the 3rd, the jeonse prices in the metropolitan area new towns fell by 0.01% compared to the previous week in the last week of March. This is the first time in 20 months since the third week of August 2019 (-0.02%) that new town jeonse prices have declined.

In new towns, Wirye and Dongtan led the negative change rate with a 0.06% drop compared to the previous week. In Wirye, ahead of the move-in of Wirye Foret Ja-i and Hillstate Book Wirye, prices fell by up to 10 million KRW in places like Changgok-dong Wirye Central Prugio. In Dongtan, prices dropped by 20 million KRW in places such as Bansong-dong Simbeom Hanbit Hanwha Dream Green. Gimpo Hangang and Pyeongchon also fell by 0.04% and 0.03%, respectively.

The Seoul jeonse market is also seeing some districts turning downward. Gangdong-gu fell by 0.06% compared to the previous week, extending its decline for five consecutive weeks. Nowon and Guro also dropped by 0.03% and 0.01%, respectively, as jeonse listings were slowly absorbed. In March, Songpa, Gangnam, and Geumcheon-gu also recorded negative change rates at times. However, the average jeonse price of Seoul apartments rose by 0.03%, continuing the upward trend. By region, the increases were ▲Gangseo (0.11%) ▲Gangbuk (0.1%) ▲Gwanak (0.1%) ▲Dobong (0.1%).

Gyeonggi and Incheon rose by 0.07% compared to the previous week. By region, Uijeongbu rose the most at 0.28%, followed by Osan (0.25%) and Siheung (0.19%). On the other hand, Hanam fell by 0.03% compared to the previous week, and Uiwang and Seongnam also dropped by 0.02% each due to decreased jeonse demand.

The sales market saw a reduced rate of increase but still maintained an upward trend. The average sales price of Seoul apartments rose by 0.07% compared to the previous week. General apartments increased by 0.08%, and reconstruction apartments rose by 0.02%, showing a reduced growth rate.

In Seoul, prices are strong mainly in large complexes. Dobong-gu led the rise with a 0.35% increase compared to the previous week. Real Estate 114 explained, "The price increase near Changdong Station, which benefits from the GTX-C line and other positive factors, continued." Following were ▲Gangbuk (0.19%) ▲Songpa (0.14%) ▲Dongjak (0.13%).

New towns rose by 0.04%. The apartment sales prices in Pyeongchon, where jeonse prices fell, increased by 0.13% compared to the previous week. Next were Jungdong (0.08%), Sanbon (0.07%), and Ilsan (0.06%). Gyeonggi and Incheon rose by 0.11% compared to the previous week. Osan rose the most at 0.22%, and Ansan also showed a spreading upward trend, rising 0.21% after Sangnok Station was mentioned as a stop on the GTX-C line.

Ye Kyung-hee, chief researcher at Real Estate 114, said, "The jeonse market showed localized weakness as demand decreased with the end of school district demand and large-scale move-ins proceeded. In the second quarter, the supply of apartments in the metropolitan area is expected to decrease, and jeonse listings are expected to decline due to conversion to monthly rent caused by holding tax burdens, so it is necessary to observe the market situation a bit more."

She forecasted that the sales market would continue to take a breather for the time being. Chief researcher Ye added, "The buyer's wait-and-see attitude that emerged after the 2.4 measures has spread due to rising interest rates and holding tax burdens, but since there are not many listings on the market and owners are holding firm on asking prices, the upward trend has continued. Ahead of the Seoul mayoral by-election, as remarks about deregulation have been made one after another, there is also a movement to wait and see for now."

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