Jinju Jeonse Prices Soar Amid Demand from Lease 2 Laws and School Districts

Jinju-si Weekly Jeonse Price Increase Rate 0.70%... Highest Nationwide Increase

[Asia Economy Reporter Minyoung Kim] The apartment jeonse market in the Jinju area of Gyeongnam is showing unusual signs. Although concerns about reverse jeonse difficulties were raised just three years ago, prices have recently surged, recording the highest increase rate nationwide even after the moving season has passed. As nearby major cities such as Busan and Changwon were designated as regulated areas, investment from outsiders poured into Jinju, a non-regulated area, pushing up both sale and jeonse prices. Additionally, the supply has decreased due to the Lease Protection Act (right to request contract renewal and rent ceiling system), while the number of people moving to Jinju from surrounding cities like Hapcheon-gun and Uiryeong-gun for school districts has increased.

According to KB Kookmin Bank Live On on the 20th, the weekly jeonse price increase rate in Jinju as of the 8th reached 0.70%, the highest among all cities, counties, and districts nationwide. A KB Kookmin Bank official evaluated, "As investment demand flows into the non-regulated area, both sale and jeonse prices are rising together," adding, "Demand has increased not only in new town areas such as Chungmugong-dong and Chojeon-dong but also in old town areas."

Looking at statistics from the Korea Real Estate Board, the jeonse price increase trend in Jinju is steep. The average apartment jeonse price, which was 147.33 million won in November last year, rose to 182.14 million won last month, jumping 23% in 11 months.

An official from A Real Estate Agency in Chojeon-dong said, "For Chojeon Prugio 84㎡ (exclusive area), the jeonse price for affordable units is around 300 million won," adding, "At the end of last year, the actual sale price was between 300 million and 320 million won." In one year, the jeonse price has nearly caught up with the sale price.

In 2019, Jinju was a place where reverse jeonse was feared due to oversupply and regional economic recession. For example, the jeonse price of Chungmugong-dong H Apartment 84㎡ was 315 million won in June 2017 but dropped almost by half to 177.5 million won in March 2019.

The surge in jeonse prices in the Jinju area is due to a decrease in jeonse supply caused by the Lease Protection Act, combined with increased population inflow to Jinju for school districts. As nearby Busan and Changwon were designated as adjusted target areas, investors flocked to Jinju, a non-regulated area, causing sale prices to rise and pushing up jeonse prices. Demand has outpaced supply, keeping jeonse prices high.

An official from B Real Estate Agency in Chungmugong-dong said, "Due to the implementation of the Lease Protection Act, the number of people renewing contracts has increased, reducing jeonse supply. Also, many people are moving in from Hapcheon-gun, Sancheong-gun, Uiryeong-gun, and Sacheon-si for school districts, so supply is insufficient compared to demand."

According to real estate agents, some actual buyers are uneasy because sale and jeonse prices are similar in some areas, making it impossible to subscribe to jeonse deposit insurance. An official from B Real Estate Agency said, "In some parts of Chojeon-dong, sale and jeonse prices are similar, so some properties cannot be insured with jeonse deposit insurance. However, since there are so few properties available, some people are considering signing contracts even for these properties."

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