Seoul Apartment Jeonse Prices Rise for 102 Consecutive Weeks

'Lease 3 Laws' Supposed to Control Jeonse Prices, but Shortage Side Effects Arise
Cumulative Increase of 8.17% Over Two Years Since First Week of July 2019
'Gangnam 3 Districts' Including Seocho, Gangnam, and Songpa Lead the Rise

[Asia Economy Reporter Jo Gang-wook] The jeonse prices of apartments in Seoul have continuously risen without a single week of decline over the past two years. It has been pointed out that the Lease 3 Act, introduced to protect tenants, has instead caused side effects such as a sharp decrease in listings, a shortage of jeonse properties, and a rapid increase in jeonse prices.

According to the weekly apartment price trend time series data from the Korea Real Estate Board on the 17th, Seoul apartment jeonse prices have risen continuously for 102 weeks from the first week of July 2019 until last week without a single break. Including the period from the second week of June 2019 when prices shifted from -0.01% to stable (0.00%) in the 3rd to 4th weeks, the upward trend has continued for exactly two years (104 weeks) without any decline.

Seoul's jeonse prices showed signs of stabilization with a slowdown in the rate of increase from February to May last year, but began to decrease in listings after the June 17th measures included a two-year actual residence obligation for reconstruction apartments. Furthermore, after the sudden introduction of the Lease Renewal Request Right and the Rent Cap System, part of the Lease 2 Act, at the end of July that same year, the shortage of jeonse properties intensified and jeonse prices surged. As a result, from July to December last year, Seoul's jeonse prices rose significantly every week, ranging from a minimum of 0.08% to a maximum of 0.17%.

In fact, from the third week of June 2019 to last week, Seoul apartment jeonse prices increased by 8.17% over two years. By region, Seocho-gu saw the highest increase at 13.12%, followed by Gangnam-gu (12.87%) and Songpa-gu (11.38%), indicating that the ‘Gangnam 3 districts,’ known for high-priced jeonse, led the rise in jeonse prices. Additionally, the upward trend in jeonse prices was also clear in emerging high-priced apartment areas such as Dongjak-gu (10.51%), Mapo-gu (9.34%), and Seongdong-gu (8.90%).

For example, in Banpo-dong, Seocho-gu, the jeonse contract for an 84.93㎡ unit in Raemian Prestige was signed on the 14th of last month with a deposit of 2 billion KRW (2nd floor), sharply rising by about 750 million KRW compared to two years ago (around 1.25 billion KRW). Similarly, in Oksu-dong, Seongdong-gu, the jeonse price for an 84.51㎡ unit in Raemian Oksu Riverzen nearly doubled over two years, rising from a deposit of 650 to 660 million KRW (16th and 12th floors) in March 2019 to 1.2 billion KRW (12th floor) on the 11th of this month.

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