Seoul Apartment Jeonse Transactions with Price Increases in Q2 Exceed 50% Compared to Q1

Seoul Metropolitan Area Apartment Jeonse Price Increase Transaction Share 49.6%

About half of the apartment jeonse contracts in the Seoul metropolitan area in the second quarter of this year were traded at higher prices than in the first quarter. However, since the average jeonse price has fallen more than 10% compared to the previous peak, localized reverse jeonse situations are expected to continue.

[Image source=Yonhap News]

According to Real Estate R114 on the 26th, among the total 219,557 apartment jeonse contracts signed in the Seoul metropolitan area from January to June this year, a comparison of the highest transaction prices for 20,022 cases where at least one transaction occurred in the same complex, area, and floor in both the first and second quarters showed that the proportion of apartment transactions with higher prices in the second quarter compared to the first quarter was 49.6% (9,930 out of 20,022 cases).

In particular, Seoul recorded a proportion of rising transactions exceeding half at 50.8% (3,647 out of 7,182 cases). This was followed by Gyeonggi at 49.2% (5,429 out of 11,039 cases) and Incheon at 48.0% (854 out of 1,781 cases).

[Image provided by Real Estate R114]

Although the number of transactions with increased prices compared to before is rising, more time is needed to recover to the previous peak price level. According to Real Estate R114, as of the 21st, the average jeonse price per household for apartments in the Seoul metropolitan area was 438.94 million KRW, which needs to increase by 63.28 million KRW to recover the previous peak price (502.2 million KRW).

The region with the largest price drop compared to the previous peak is Incheon. Incheon’s average jeonse price was 265.25 million KRW, down 18.8% from the previous peak of 326.67 million KRW. The largest declines were observed in Yeonsu-gu, Namdong-gu, and Jung-gu, where there was an influx of new residents. Seoul’s average jeonse price was 603.79 million KRW, down 12.7% from the previous peak of 691.74 million KRW. Areas such as Gangdong, Songpa, and Dongjak, which faced issues with an oversupply of large complex listings, showed a significant price gap compared to the previous peak.

Yeo Kyung-hee, Senior Researcher at Real Estate R114, said, “In areas with concentrated new housing supply or low demand in the outskirts, the accumulation of listings may increase concerns about reverse jeonse due to weak prices. However, new jeonse demand is flowing in due to reduced price burdens, and cases of transactions at higher prices than before are increasing, leading to regions where jeonse prices are rebounding.” She added, “Furthermore, if the effect of eased regulations on loans for jeonse deposit returns is added, the risk level of reverse jeonse in the Seoul metropolitan apartment market in the second half of the year is expected to be lower than anticipated.”

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