The Era of "20 Billion Won Jeonse for 84㎡ in Gangnam Area" Has Begun

Seocho-gu Banpo-dong Acro River Park 84㎡ Jeonse 2 Billion KRW Transaction
Gangnam-gu Daechi-dong Raemian Daechi Palace Also 1.9 Billion KRW Transaction
Over 1 Billion KRW Transactions Emerging in Non-Gangnam Areas
"Aftershocks of New Lease Protection Law Including Contract Renewal Request"

Acro River Park, Banpo-dong, Seocho-gu, Seoul

[Asia Economy Reporter Onyu Lim] The era of 2 billion KRW jeonse for an 84㎡ (exclusive area) apartment in the Gangnam area of Seoul has begun. This is the result of a sharp rise in jeonse prices as the new lease protection law, including the right to request contract renewal and the cap on monthly rent increases, has intensified the jeonse shortage in Seoul. In non-Gangnam areas, contracts exceeding 1 billion KRW are also emerging one after another.

According to the Ministry of Land, Infrastructure and Transport's apartment real transaction price disclosure system on the 23rd, an 84㎡ unit in Acro River Park, Banpo-dong, Seocho-gu, Seoul, signed a jeonse contract at the highest price of 2 billion KRW (3rd floor) on the 15th. The previous highest price in this complex was 1.66 billion KRW (20th floor) recorded in August. In just three months, the jeonse price rose by 340 million KRW. This is the first time that the jeonse price of an 84㎡ apartment in Seoul has exceeded 2 billion KRW. Acro River Park is also a representative complex in Gangnam that was the first in Korea to surpass 100 million KRW per 3.3㎡ in sale price.

As complexes with jeonse prices exceeding 1.8 to 1.9 billion KRW are emerging one after another in the Gangnam area recently, it is expected that transactions over 2 billion KRW will occur within a few months. Earlier, an 84㎡ unit in Raemian Daechi Palace, Daechi-dong, Gangnam-gu, was leased for 1.9 billion KRW in September. In addition, an 84㎡ unit in Raemian Prestige, Banpo-dong, was leased for 1.7 billion KRW on the 16th, and an 85㎡ unit in Dogok Rexle, Dogok-dong, Gangnam-gu, was leased for 1.775 billion KRW on the 20th of last month. The jeonse asking prices for 84㎡ units in these complexes are reaching 2 billion KRW.

Most ultra-high jeonse contracts over 1.5 billion KRW have occurred in the Gangnam area, but recently, jeonse contracts exceeding 1 billion KRW have also been reported one after another in non-Gangnam areas. An 84㎡ unit in Raemian Mapo Riverwell, Yonggang-dong, Mapo-gu, was leased for 1.02 billion KRW last month. An 84㎡ unit in Mapo Raemian Prugio Complex 1, Ahyeon-dong, also signed a jeonse contract for 1 billion KRW. Acro River Heim in Heukseok-dong, Dongjak-gu, which was the first in the non-Gangnam area to surpass 2 billion KRW per 3.3㎡ in sale price, was leased for 1.1 billion KRW for an 84㎡ unit on the 19th.

The sharp rise in Seoul's jeonse prices is largely due to the new lease protection law implemented at the end of July. As more tenants exercised their right to request contract renewal and extended existing jeonse contracts, the supply of available units in the lease market decreased. According to KB Real Estate's weekly housing market trend, as of the 16th, Seoul apartment jeonse prices rose by 0.53%, increasing the rate of rise compared to the previous week (0.46%). On the 2nd, the increase was 0.70%, marking the highest in 11 years.