Jeonse prices rise in Jung-gu and Gangbuk-gu after Seongbuk and Dongdaemun

'Shortage will persist without private-sector supply'

A view of residential buildings in Seoul as seen from N Seoul Tower on Namsan. [Herald DB]
A view of residential buildings in Seoul as seen from N Seoul Tower on Namsan. [Herald DB]

Seoul's apartment jeonse prices are rising rapidly, with the surge spreading beyond Dongdaemun-gu and Seongbuk-gu to lower-priced outer districts such as Jungnang-gu, Gangbuk-gu and Geumcheon-gu, where deposits are now approaching 1 billion won ($722,000).

Mia-dong standard unit jeonse up 100 million won in a month

According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system, a 114-square-meter unit at Sagajeong Central I'Park in Myeongmok-dong, Jungnang-gu set a new record on Aug. 3 when a jeonse contract was signed with a deposit of 1.05 billion won. The 84-square-meter unit — widely known as the standard family size — also set a new high on Sept. 5 at 870 million won.

Jeonse prices have climbed steeply throughout this year. An 84-square-meter unit at Hanwha Forena Mia in Mia-dong, Gangbuk-gu was contracted June 26 at 950 million won — 100 million won more than a month earlier. In Geumcheon-gu to the southwest, an 84-square-meter unit at Lotte Castle Gold Park 3 in Doksan-dong traded Sept. 4 at 810 million won, the first time that floor plan's jeonse price has exceeded 800 million won since October 2021.

In Seongbuk-gu and Dongdaemun-gu, where sale prices have also risen sharply this year, jeonse deposits for newly built apartments crossed the 1 billion won mark some time ago. An 84-square-meter unit at Lotte Castle Classier in Gireum-dong, Seongbuk-gu was leased Aug. 15 at 1.1 billion won — a rise of 230 million won in roughly six months from the 870 million won recorded for the same unit type in February. An 84-square-meter unit at Cheongnyangni Station Lotte Castle SKY-L65 in Jeonong-dong, Dongdaemun-gu also traded at 1 billion won on July 28.

Smaller units are seeing the same upward trend. A 59-square-meter unit at e-Convenience World Cheongye Central Forest in Yongdu-dong, Dongdaemun-gu set a new jeonse record Sept. 13 at 820 million won. The contract was a renewal in which the tenant did not exercise the right to request contract renewal, up from a previous deposit of 710 million won — a rise of 110 million won in just two years.

Analysts attribute the trend to a persistent shortage of jeonse and monthly-rent listings, driven by tightened owner-occupancy requirements and stricter regulations on multi-home owners. According to Asil, a real estate big data platform, the number of jeonse and monthly-rent listings in Seoul stood at 37,312 on Tuesday, down 12.5 percent from 42,627 a year earlier.

Share of deposits above 500 million won rising in Geumcheon and Nowon — 'Private supply must be revived'

A real estate agency in Eunpyeong-gu, Seoul. [Yoon Chang-bin]
A real estate agency in Eunpyeong-gu, Seoul. [Yoon Chang-bin]

What makes the situation particularly acute is that the districts now seeing the steepest rent increases have long served as the last affordable rung on Seoul's housing ladder for lower-income residents. According to the Korea Real Estate Board, Seoul's apartment jeonse price index rose 0.95 percent from the previous month to 102.25 in August. Seongbuk-gu posted the sharpest increase at 1.82 percent, followed by Geumcheon-gu at 1.7 percent, Nowon-gu at 1.69 percent, Seodaemun-gu at 1.5 percent and Gangbuk-gu at 1.44 percent, underscoring how the surge is concentrated in outer districts.

Affordable jeonse listings in Seoul have become increasingly scarce. An analysis of Ministry of Land, Infrastructure and Transport transaction data shows that as of August, only three districts — Dobong-gu, Geumcheon-gu and Nowon-gu — had average jeonse prices at or below 400 million won. Of the 18,287 jeonse and monthly-rent contracts signed in those three districts from January through Tuesday, 1,750 — or 9.57 percent — carried deposits of 500 million won or more, exceeding each district's average jeonse price. That compares with 8.42 percent, or 1,803 contracts out of 21,421, during the same period last year — an increase of 1.15 percentage points, reflecting continued upward pressure on jeonse prices.

Geumcheon-gu showed the most pronounced shift. Total jeonse and monthly-rent transactions in the district fell sharply from 3,181 during the same period last year to 2,160 this year, yet contracts worth 500 million won or more actually edged up from 259 to 263. Their share of all contracts rose from 8.15 percent to 12.18 percent. Nowon-gu saw overall transactions decline 8.9 percent from 13,694 to 12,473, while contracts of 500 million won or more increased 5.1 percent from 1,129 to 1,187.

Experts said the jeonse crunch cannot be resolved without reviving private-sector housing supply. "As long as supply remains insufficient, jeonse and monthly-rent prices will have no choice but to keep surging, and government supply alone cannot solve the problem," said Seo Jin-hyeong, a professor in the real estate law department at Kwangwoon University. He added that "the government should focus on providing welfare for a subset of the most vulnerable residents, while leaving the remaining 90 percent to the private market."


shy@heraldcorp.com
hss@heraldcorp.com