One in Three Seoul Villa Jeonse Transactions This Year Are 'Reverse Jeonse'... "Worsening in Second Half"

Average Jeonse Deposit Falls by 28.59 Million KRW Compared to Previous Year
Gangnam-gu Sees the Largest Drop in Deposits

It has been revealed that one out of every three villa (row house/multi-family) lease transactions in Seoul this year involved a 'reverse jeonse' transaction, where the jeonse price dropped compared to the previous contract. The average price difference for reverse jeonse properties was confirmed to have decreased by 28.59 million KRW. Considering that lease contracts that peaked two years ago are expiring in the second half of this year, concerns are rising that the reverse jeonse crisis will worsen in the latter half of the year.

[Image source=Yonhap News]

On the 27th, Station3, which operates the domestic real estate information platform 'Dabang', analyzed 8,258 cases out of 37,697 jeonse transactions of row houses and multi-family houses in Seoul from January to May 2021, where one or more transactions occurred at the same address and area from January to May this year, based on actual transaction prices from the Ministry of Land, Infrastructure and Transport. The analysis found that 2,869 cases, or 34.7%, were reverse jeonse properties where the jeonse price fell compared to the existing deposit. This means that more than one out of every three transactions was a reverse jeonse transaction, with the average price difference for reverse jeonse properties being a decrease of 28.59 million KRW (an average drop of 11.2%).

Among reverse jeonse transactions occurring at the same address and area in Seoul's row houses and multi-family houses, the regions with the largest decrease in jeonse price compared to the existing deposit were Gangnam-gu, Seocho-gu, Songpa-gu, and Jongno-gu, in that order. The average jeonse price for reverse jeonse transactions in Gangnam-gu fell from 402.5 million KRW in January-May 2021 to 347.38 million KRW in January-May this year, a decrease of 55.12 million KRW. During the same period, Seocho-gu dropped from 366.94 million KRW to 317.59 million KRW, a decrease of 49.35 million KRW; Songpa-gu from 306 million KRW to 264.07 million KRW, a decrease of 35.99 million KRW; and Jongno-gu from 275.26 million KRW to 241.33 million KRW, a decrease of 33.92 million KRW.

Additionally, among transactions with the same conditions in Seoul's row houses and multi-family houses, the districts with the highest proportion of reverse jeonse were Yeongdeungpo-gu at 50.6%, Gangseo-gu at 47.6%, Geumcheon-gu at 44.1%, Yangcheon-gu at 42.5%, Seongbuk-gu at 41.9%, and Gangnam-gu at 41.8%, in that order.

Jang Junhyuk, head of marketing at Dabang, said, "Through this analysis, it has been confirmed that the reverse jeonse phenomenon is occurring not only in apartments but also in row houses and multi-family jeonse transactions in the Seoul area. When comparing transactions under the same conditions between the second half of 2021 and January-May 2023, about 50.7% of transactions showed a decrease in jeonse price, indicating that the reverse jeonse crisis is likely to continue in the second half of this year."

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