Signed Without Viewing for 1.6 Billion Won... Jamsil and Seongbuk Jeonse Prices Jump 200 Million Won in a Month [Real Estate AtoZ]

[On the Scene] Severe Jeonse Shortage in Seoul
Jamsil Listings Board Reads "Wanted"
No Available Units Even in the 15,000-Unit "Elite" Complex
Jeonse Deposits in Gileum New Town Jump by 200 Million Won
Turning to Villas Offers No Relie

On the 19th, at a real estate agency in Jamsil-dong, Songpa-gu, Seoul, notices for jeonse listings at Jamsil Els, Resenz, and Trizium (also called "Elite") apartments were posted on the exterior window. However, the agency owner commented, "They're just for show. There are no jeonse listings available. You can see there are no prices indicated." Even across the large-scale "Elite" complex, which consists of 14,837 households, it was difficult to find jeonse properties available for immediate move-in. As of the second week of this month, Songpa-gu recorded a weekly jeonse price increase rate of 0.50%, ranking second among Seoul’s autonomous districts.

On the 19th, at a real estate agency in Jamsil-dong, Songpa-gu, Seoul, a signboard displayed the phrase "Looking for sale, jeonse, and monthly rent." As the number of jeonse listings decreases, agencies are requesting property listings not only from tenants but also from landlords. Photo by Seo-yoon Choi

Real estate agencies in the Jamsil area are practically at a standstill due to the severe shortage of jeonse listings. The head of a Jamsil-dong agency said, "I haven't been able to close a single jeonse deal recently. As tenants are renewing their existing contracts, new supply coming to the market has dried up."

Another agency owner stated, "Jeonse prices that used to be between 1.2 and 1.3 billion won are now being offered at 1.5 billion won. If a 1.6 billion won unit does come up, buyers have no choice but to sign the contract without even viewing the property." Although the government continues to implement policies aimed at encouraging multi-homeowners to put their properties on the market, such as grace periods for single-homeowner occupancy requirements, these policies have not led to an increase in available listings on the ground.

According to transaction data from the Ministry of Land, Infrastructure and Transport, the share of renewed contracts in Seoul from May 1 to 19 reached 55.6%. A year ago, new contracts accounted for 53.2%, surpassing renewals at 46.8%, but this trend has now reversed. Another agency owner in Jamsil-dong explained, "Normally, this would be a time when jeonse and monthly rental listings would pile up, but because people have exercised their renewal rights, there are no properties coming to market. As loan limits have tightened, tenants who were planning to purchase are now staying in jeonse instead."

The increase in jeonse deposits is also significant. The average jeonse deposit for apartments in Seoul rose 4.4% over the past year, from 591.02 million won to 617.02 million won. In Songpa-gu, the average jeonse deposit surged 14.5%, from 710.54 million won to 813.80 million won. For a 20th-floor, 84-square-meter unit at Resenz, the jeonse deposit for a new contract jumped by 230 million won in just one month, from 1.35 billion won on April 14 to 1.58 billion won on May 15.

On the 19th, at the Resenz Apartment Complex in Jamsil-dong, Songpa-gu, Seoul. The rental listings in this complex, which has a total of 5,563 households, were only 85 as of that day. This is about 1.5% of the total number of households. Photo by Seo Yoon Choi

With the sharp rise in jeonse prices, a dual pricing phenomenon has become evident. On May 13, a new jeonse contract for an 84-square-meter unit on the 18th floor at Resenz was signed at 1.5 billion won. This is more than 400 million won higher than the renewal contract for the same floor on April 3, which was 1.081 billion won. At Trizium, a 59-square-meter unit on the 4th floor was renewed at 525 million won in January, while a new contract for the same floor in March was signed at 700 million won.

Seongbuk-gu, which ranks first among Seoul’s districts for both year-to-date jeonse price growth (4.73%) and the most recent weekly increase (0.51%) as of the second week of this month, is experiencing a similar situation. At E Pyeonhansesang Gilum New Town Phase 4, an 84-square-meter unit on the 4th floor was renewed at 600 million won in March, but a new contract in April was signed at 800 million won. At Raemian Gilum Centerpiece, an 84-square-meter unit on the 5th floor was renewed at 900 million won in March, and in February, a 59-square-meter unit on the 4th floor set a new record high with a transaction at 700 million won.

The jeonse shortage in the Seongbuk-dong area is now spreading beyond apartments to the villa market. According to one Gilum-dong agency owner, "There are no apartment jeonse listings, and prices have soared to the 800 million won range, so some clients are turning to villas instead. But even villa jeonse options have dried up."

Another local agent said, "At Raemian Gilum New Town Phase 5, there was only one listing for a unit in the 30-pyeong range across the entire complex, and it was snapped up in just three weeks for 850 million won without any negotiation. Tenants are struggling because their incomes remain the same, but jeonse prices have risen by hundreds of millions of won." As of this day, there were zero jeonse listings in Gilum New Town Phase 4, which consists of 1,605 households, and only three in Phase 2, which has 1,634 households.

Although some are shifting to home purchases, many buyers without sufficient financial means are being pushed into "banjeonse" (a hybrid lease with a partial deposit and monthly payment), accepting higher housing costs. The head of a Sangye-dong real estate agency in Nowon-gu explained, "There are no jeonse listings at all, and even when they do appear, most come with senior mortgage liens. To secure lump-sum funds or cover interest payments, landlords are lowering the deposit and opting for the banjeonse model, which requires monthly payments, as the only form of rental available in the market."

On the 19th, at the Raemian Gilum 2nd Apartment Complex in Gilum-dong, Seongbuk-gu, Seoul, as demand for jeonse in the Gilum New Town area increases, some complexes are seeing new jeonse prices traded at record high levels. Photo by Seo-yoon Choi

Park Won-gap, Chief Real Estate Expert at KB Kookmin Bank, said, "Although Seoul apartment jeonse prices appear to have risen significantly, they have not yet recovered to the peak levels of 2022. With demand for jeonse persisting and listings remaining scarce, the upward trend is likely to continue for some time." He pointed out that, using January 2022 as an index of 100, the figure as of March this year was 97.3, showing that prices are still 2.7% below the previous peak.

He added, "The fact that jeonse prices remain below the previous peak indicates that market participants still have room to accept further price increases. Especially in areas like Jungnang, Guri, and Dongtan, where the jeonse-to-sales price ratio has already exceeded 60%, rising jeonse prices could even stimulate increases in sales prices."

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