120,000 Households in the Seoul Metropolitan Area Face 'Empty Lease' Concerns... Over Half Are 21-30 Years Old Buildings

Real Estate R114 Analysis Results

[Asia Economy Reporter Kim Hyemin] It has been revealed that there are more than 120,000 apartment units in the Seoul metropolitan area with a jeonse price ratio exceeding 80%, posing a high risk of "empty jeonse" (Kkangtong Jeonse). The largest proportion was found in older apartments built 21 to 30 years ago.

On the 6th, Real Estate R114 analyzed 3,370,684 apartment units in the metropolitan area with confirmed sales or jeonse price data as of the end of August. The analysis showed that 126,278 apartments had jeonse prices exceeding 80% of their sales prices.

By region, Incheon accounted for 6.1% (28,217 out of 461,790 units), Gyeonggi Province 5.5% (95,558 out of 1,726,393 units), and Seoul 0.2% (2,503 out of 1,182,501 units). Apartments in areas with relatively large declines in sales prices and high jeonse price ratios were more likely to face the risk of empty jeonse.

By apartment age, older apartments showed a higher risk of empty jeonse compared to newly built ones. The survey found that apartments aged 21 to 30 years accounted for 75,203 units, representing 59.6% of the total.

Next were apartments aged 11 to 20 years with 34,428 units (27.3%), followed by those aged 6 to 10 years with 9,663 units (7.7%). In contrast, newly built apartments less than 5 years old with higher sales prices accounted for only 1,091 units, or 0.9%.

The risk of empty jeonse increased with the age of the apartment; however, apartments over 30 years old had only 5,893 units (4.7%) exceeding the 80% jeonse price ratio despite being older buildings. This is attributed to the fact that many of these over-30-year-old apartments are undergoing reconstruction. Among the total 598,007 apartments over 30 years old surveyed, 33.5% (201,450 units) are currently under reconstruction, all with jeonse price ratios below 80%.

Yeo Kyung-hee, Senior Researcher at Real Estate R114, stated, "Apartments generally have a lower risk of empty jeonse compared to villas or detached houses, but caution is needed in certain regions and complexes with high jeonse price ratios. In the metropolitan area, Incheon, older apartments rather than new ones, and complexes that saw rapid price increases during the housing boom followed by quick adjustments are areas of concern for empty jeonse occurrence."

Senior Researcher Yeo added, "In a market with extremely low transaction volume like now, it is difficult to accurately determine the jeonse price ratio based solely on actual transaction prices. It is necessary to refer to real-time market prices (market value) for better assessment."

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