Multiple Areas in the Capital Region See 'Jeonse Price Decline'... Sudden Surge in Listings in Seoul Too

Incheon Seo-gu 470%, Uijeongbu 331%, Gwangjin-gu 321%
Apartment listings surge compared to a year ago due to demand contraction
This week, multiple decline areas including Seongbuk-gu, Incheon Seo-gu, Hwaseong

The apartment sales market is rapidly freezing up, followed by the jeonse (long-term lease) market. There are areas where jeonse listings have surged 4 to 5 times within a year, not only in the outskirts of the Seoul metropolitan area but also in Seoul itself. This is interpreted as a result of sharply reduced new jeonse demand due to high jeonse prices, weakened buying power, and the activation of the contract renewal request right. This week, many places in Seoul, Gyeonggi Province, and Incheon have also seen jeonse prices turn downward.

According to the Korea Real Estate Board on the 24th, the nationwide apartment jeonse supply-demand index recorded 99.4 this week, falling below the baseline of 100 for the first time in about 1 year and 6 months since June 22 last year (99.9). This means that supply has exceeded demand in the nationwide jeonse market. The Seoul jeonse supply-demand index (93.9) has been below the baseline for three consecutive weeks, and Gyeonggi Province (97.0) for four consecutive weeks.

As jeonse demand weakens, the downward market has also begun in earnest. This week, jeonse prices turned downward in Seoul’s Seongbuk-gu (-0.02%), Incheon’s Seo-gu (-0.02%), Hwaseong-si (-0.06%), Seongnam’s Jungwon-gu (-0.03%), and Suwon’s Gwonsun-gu (-0.02%). Seoul’s Geumcheon and Gwanak-gu, and Gyeonggi’s Guri and Hanam-si shifted to a stable trend. Areas like Anyang, Suwon’s Yeongtong-gu, and Uijeongbu, which had already entered negative territory, saw further declines.

The reason the jeonse market is faltering like this is due to severe accumulation of listings. According to the real estate information company ‘Apartment Real Transaction Price (Asil)’, as of this day, Seo-gu in Incheon has 2,539 jeonse listings, a 470.5% increase compared to 445 listings a year ago. Seoul’s Gwangjin-gu increased from 248 to 1,045 listings, a 321.3% rise, and Eunpyeong-gu from 317 to 1,061 listings, a 234.7% increase. Hongje-dong in Seodaemun-gu and Daechi-dong in Gangnam-gu, where jeonse demand is high, saw increases of 718.1% and 501.8%, respectively.

Compared to the first half of this year, when concerns about a jeonse crisis were raised, listings have also increased significantly. In Mokdong New Town 7 Complex in Yangcheon-gu, Seoul, there were only 3 to 7 jeonse listings in June, but as of this day, 30 are registered. A homeowner in Gyeonggi Province said, "Compared to last August, jeonse prices have dropped by about 130 million KRW," adding, "I originally wasn’t worried at all about the jeonse moving out, but the atmosphere has completely changed recently."

This year, as jeonse prices in apartment complexes have surged by at least tens of millions of KRW, and the exercise of the contract renewal request right has increased, jeonse demand appears to have sharply declined. On top of this, jeonse loan regulations and interest rate hikes have increased tenants’ financial burdens.

However, since Seoul’s jeonse prices have been on the rise for 2 years and 5 months since July 2019, many believe it is difficult to hastily predict a downward turn. A Korea Real Estate Board official said, "In Gangnam-gu and Seocho-gu, where there is school district demand, jeonse prices have risen mainly in mid-to-low priced outskirts, but in some areas, the high price burden continues to cause contraction."

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