Last Year’s 'Gap Investment No.1' Gimhae: "Purchase Demand Drops as Jeonse Prices Stall"

Gimhae Saw Significant Increase in Non-Local 'Gap Investments' Last Year
But Recent Transaction Volume and Gap Investments Both Dropped Sharply
High Non-Local Purchases Make Finding Tenants Difficult
As Jeonse Prices Stall, Gap Widens and Buying Momentum Falls

[Image source=Yonhap News]

Last year, Gimhae City in Gyeongnam, where 'gap investment' involving purchasing houses with jeonse deposits was the most common nationwide, has recently seen a sharp decline in both transaction volume and the proportion of gap investments. While outside investors had driven the rise in housing prices, concerns are emerging that the price bubble may burst due to the stagnation of the local real estate market.

On the 6th, real estate information company 'Asil' analyzed the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system and found that in December last year, there were a total of 35 apartment sales suspected to be gap investments in Gimhae, accounting for 5.79% of the total reported sales transactions (604) during that period. In Gimhae, in August last year, 322 out of 1,668 total transactions were classified as gap investments, reaching a ratio of 19.30%, but this has since decreased to 18%, then 12%, then 10%, and recently dropped to the 5% range.

Gimhae was one of the places with the highest number of gap investments by outsiders nationwide last year, along with Pyeongtaek in Gyeonggi Province and Gumi in Gyeongbuk Province. In the past year alone, there have been 1,817 suspected gap investment transactions. Gap investment mainly targets houses where the difference between the sale price and the jeonse price is small. Gimhae, being close to regulated areas such as Busan and Changwon but classified as a non-regulated area with relatively low housing prices, attracted many gap investments from outsiders.

However, with the government's tightening of loan regulations, gap investment is significantly shrinking. The uncertainty in the real estate market has increased, and since many outside investors have already entered, the gap between jeonse prices and sale prices is gradually widening.

As a result, concerns about so-called 'empty jeonse'?where the jeonse price is higher than the sale price?are growing. In Gimhae, it is known that many such 'price reversal' transactions have been made recently, especially in low-priced apartments. For example, a 47㎡ unit in the A complex in Sammun-dong was sold for 110 million KRW in November last year, but at the end of December, the jeonse contract was signed for 120 million KRW, making the jeonse price 10 million KRW higher than the sale price.

Empty jeonse poses a high risk of tenants facing difficulties in recovering their jeonse deposits if the housing price rise starts to falter. In fact, some complexes in Gimhae are reportedly struggling to find tenants due to the rapid increase in gap investments last year. The jeonse price increase rate in Gimhae was 0.05% last week, about half of the Gyeongnam average (0.10%).

The representative of real estate agency B in Gwandong-dong said, "Last year, many people were looking for gap investment properties, but recently, as jeonse prices have started to fall, inquiries about gap investments have almost disappeared," adding, "Transactions are now mainly occasional and centered on actual demand."

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