Ahead of the Fall Moving Season, Jeonse Prices in the Seoul Metropolitan Area 'Simultaneously Turn Up'

Apartment jeonse prices in Seoul, Gyeonggi, and Incheon have turned upward, causing the overall jeonse prices in the metropolitan area to rebound.

[Image source=Yonhap News]

According to Real Estate R114 on the 11th, the metropolitan area jeonse prices in August rose by 0.02%, marking the first rebound since May 2022 (0.03%). Seoul, which recorded a flat rate (0.00%) in July, increased by 0.07% compared to the previous month, and Gyeonggi escaped the negative fluctuation rate to record 0.01%. Incheon saw an upward turn for the first time in 20 months since December 2021 (0.19%).

This is interpreted as being driven by increased demand returning from monthly rent to jeonse as the market interest rates on jeonse loans from commercial banks, which were in the 5-6% range at the beginning of the year, dropped to the 3-4% range, combined with demand for switching to lower prices, leading to the recovery of jeonse prices.

It is also analyzed that the increase in areas with rebounding apartment sale prices since May has become a driving force for the simultaneous rise in jeonse prices. The easing of loan regulations reduced the risk of reverse jeonse, improving tenant and landlord demand sentiment, which was also effective in raising prices.

[Image provided by Budongsan R114]

In Seoul, jeonse prices rose compared to the previous month in districts with good accessibility to business areas such as Jung-gu, Gangnam-gu, Gwangjin-gu, Seodaemun-gu, and Songpa-gu.

In Gyeonggi, Uiwang, Yongin, and Ansan recorded consecutive increases for two months following July. In Incheon, prices rose mainly in Seo-gu Cheongna and Yeonsu-gu Songdo International City.

The cumulative number of jeonse transactions in the metropolitan area from January to July this year is 94,413 cases. This is an increase of 6,265 cases compared to the transaction volume (88,148 cases) during the same period last year.

However, the jeonse transaction volume for July alone decreased by 8.4% compared to the same period last year (34,394 cases). It is judged that the transaction movement stagnated as the supply of jeonse listings decreased mainly in preferred complexes after the quick sale of urgent listings.

A Real Estate R114 official said, “With the upcoming autumn moving demand added, the upward trend in jeonse prices is likely to continue,” and added, “Gyeonggi and Incheon are also likely to move according to Seoul’s jeonse prices, but there is still a mixed price trend, and since the largest number of move-in volumes is scheduled within the fourth quarter of this year, it is necessary to observe the price trends by region a bit more.”

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