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[Asia Economy Reporter Onyu Lim] The jeonse prices in the Mokdong area of Yangcheon-gu, a representative popular school district in the southwestern part of Seoul, are showing unusual signs. This is due to the early concentration of school district demand amid the normalized jeonse shortage following the implementation of the new Housing Lease Protection Act. The jeonse shortage triggered by reconstruction in Seocho-gu is spreading not only to the Gangnam area but also to popular school districts such as Yangcheon and Nowon, causing ongoing market instability with no clear exit.

According to the Korea Real Estate Board on the 17th, the jeonse prices of apartments in Yangcheon-gu recorded the highest increase rate in Seoul for three consecutive weeks from the fourth week of July to the second week of this month. Until April and May, the jeonse price increase rate in Yangcheon-gu was stable, even showing a negative trend. However, it rebounded starting from the third week of June with a 0.02% increase and surged to 0.25% in the second week of July, maintaining a high increase rate of 0.24% to 0.29% every week thereafter.

The rise in jeonse prices in Yangcheon-gu is led by new town apartments in the Mokdong and Sinjeong-dong areas. These are representative popular school districts along with the Gangnam area.

The 95㎡ (exclusive area) apartment in Sinshigaji 6 Complex was leased for 1.2 billion KRW on the 23rd of last month. This price was 100 million KRW higher than the 1.1 billion KRW at the beginning of the year. As jeonse prices, which had stalled from February to May, rose sharply, the price difference between new contracts and renewal contracts reached nearly double. The same-sized apartment under the contract renewal right was leased for 661.5 million KRW on the 24th of last month.

Sinshigaji 7 Complex 59㎡, adjacent to Mokdong Station on Subway Line 5 and eligible for excellent school district assignment, has a asking price of 680 million KRW, which is 80 million KRW higher than the actual transaction price of 600 million KRW in June. According to a nearby brokerage office, there is only one jeonse listing of this size in the entire complex.

Local real estate agents say the recent jeonse market situation in Yangcheon-gu is somewhat different from the past. Typically, the summer vacation period has relatively less jeonse demand compared to the winter vacation moving season when the new school year starts, and actual jeonse contracts are usually completed before the vacation. Unlike the usual concentration of demand during the winter vacation for new school enrollment or school assignments, this year there is an unusually early surge in demand during the summer vacation, according to field reports.

A representative from Mokdong A Real Estate Office said, "Jeonse listings are particularly scarce this summer," adding, "With the new lease law increasing renewal contracts and causing a shortage of listings, the demand for early moving jeonse has noticeably increased." He further predicted, "Although the market may ease slightly after the school term starts, the jeonse shortage will continue through the fall moving season and winter vacation."

Nowon-gu, which includes Sanggye-dong and Junggye-dong, shows a similar atmosphere. In Cheonggu 3rd Complex in Junggye-dong, close to the academy district, there is only one jeonse listing among the total 780 households. The asking price is 900 million KRW, 50 million KRW higher than the actual transaction price of 850 million KRW recorded in May. A representative from Junggye-dong B Real Estate Office explained, "More people are considering moving early during the summer vacation, thinking it is more reasonable than facing higher jeonse prices in winter when school district demand intensifies."

The early surge in school district demand seems to be influenced by concerns that jeonse listings will decrease across the market. According to Real Estate 114, the number of apartment move-ins in Seoul in the second half of the year is expected to be 13,141 households, 25.9% less than in the first half. There is also a forecast that next year’s move-in volume will sharply drop by 33.7% to 20,463 households compared to this year.

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