Spring Moving Season... Jeonse Market 'Quiet'

Seoul Jeonse Price Increase Rate Stays at 0.03%
Transaction Volume Decreases, Listings Steadily Maintain Around 20,000
Impact of Increased Move-in Volume and Short-term Surge Fatigue

[Asia Economy Reporter Kim Hyemin] The Seoul apartment jeonse (long-term lease) market remains calm during the spring moving season. This contrasts with the sales market, which is bustling with expectations of eased reconstruction regulations. Although concerns about a spring jeonse shortage were raised earlier this year, the rate of price increase has actually slowed since March. This is attributed to large-scale move-ins in some areas and a short-term adjustment due to fatigue from the sharp price surge following the implementation of the Lease Protection Act last year.

According to Real Estate 114 on the 28th, the weekly increase rate of Seoul apartment jeonse prices was only 0.03% compared to the previous week. This trend has continued for about a month since the last week of March. The jeonse price increase rate rose to 0.21% at the beginning of the year but has steadily decreased since then. This contrasts with the sales price increase rate, which hit a low of 0.05% earlier this month but then expanded to 0.08%.

Typically, from March to May, spring moving demand causes jeonse listings to become scarce or prices to rise. However, this year deviates from that pattern. Although jeonse listings have decreased this month, this is largely seen as a base effect from the sharp accumulation of listings earlier in the year. According to apartment transaction big data firm Apartment Real Transactions, as of this date, Seoul’s apartment jeonse listings stand at 23,062 units, consistently maintaining the 20,000-unit range since January 22.

Seoul apartment jeonse transaction volumes have also declined. According to the Seoul Real Estate Information Plaza, the number of jeonse transactions in Seoul was 9,313 in January, decreasing to 8,188 in February and 7,725 in March. As of the 28th of this month, 4,059 transactions have been reported. However, considering the one-month reporting period for actual transactions, the final transaction volume for April is expected to increase somewhat.

The adjustment in apartment jeonse prices appears largely influenced by increased move-in volumes centered in Gangdong-gu. Yeo Kyung-hee, Senior Researcher at Real Estate 114, said, "Due to price increase fatigue and contract renewals, demand movement is not very active," adding, "In some areas where listings have been slow to clear due to move-in effects, jeonse prices have shown a tendency to adjust."

However, the fact that jeonse prices continue to rise slightly remains a burden for tenants. According to KB Kookmin Bank’s Liv Real Estate, the average jeonse price for apartments in Seoul exceeded 600 million KRW for the first time last month and rose by 4.42 million KRW this month. In particular, the average jeonse price for apartments in the 14 districts north of the Han River was 496.27 million KRW, approaching 500 million KRW.

Although the market has stabilized, the consensus is that the possibility of jeonse prices reversing into a decline is low. Senior Researcher Yeo forecasted, "With the implementation of the June monthly rent and jeonse reporting system approaching, landlords are switching to monthly rent due to concerns over tax burdens," adding, "A decrease in jeonse listings is expected, so the recent upward trend is likely to continue." In May, there are no apartment move-ins scheduled in Seoul. In contrast, May last year saw 8,596 new move-ins. This is the first time since July 2014 that there are no move-ins.

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