Rising Jeonse Prices in Gangbuk Spread Nationwide
ePyeonhansesang Sinchon Agent "No Listings Under 1 Billion Won"
Excellent School District in Outskirts Nowon-gu Sees 800 Million Won Jeonse Transactions
[Asia Economy Reporter Onyu Lim] The ceiling for jeonse prices in northern Seoul has been broken. After the jeonse price of an 84㎡ (exclusive area) apartment in the Mayongseong (Mapo, Yongsan, Seongdong districts) area surpassed 1 billion KRW, contracts in the 900 million KRW range have been rapidly signed in Dongdaemun and Seodaemun districts, engaging in a "price matching" trend. Even the jeonse prices of older apartments in Nowon district, an outer area with excellent school districts, have soared to 800 million KRW. Although the government announced the November 19th jeonse measures, experts point out that it is insufficient to stabilize the jeonse market.
According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system on the 5th, an 84.93㎡ apartment in E-Pyeonhansesang Sinchon 3 Complex in Bukahyeon-dong, Seodaemun-gu, Seoul, signed a jeonse contract for 950 million KRW on the 1st. This is the first case in Seodaemun-gu where the jeonse price of an apartment under 85㎡ reached the 900 million KRW range. The jeonse price of this apartment, which was at a maximum of 756 million KRW in September, rose by nearly 200 million KRW in less than three months. A representative from Bukahyeon-dong A Real Estate Agency (hereafter, the agency) said, "There are only one or two 84㎡ jeonse listings in the entire E-Pyeonhansesang Sinchon complex, which has nearly 2,000 households, so jeonse availability has dried up," adding, "No landlord has listed their property below 1 billion KRW."
On the same day, the second contract exceeding 900 million KRW was signed in Dongdaemun-gu. A jeonse listing of 84.99㎡ in Raemian Weave, Dapsimni-dong, was traded at 930 million KRW. This new record was set 18 days after an 84.98㎡ unit in the same complex was traded for 900 million KRW on the 13th of last month, marking the first time in Dongdaemun-gu that the jeonse price reached 900 million KRW. The highest jeonse listing in this complex is currently priced at 950 million KRW.
Dongdaemun and Seodaemun districts are close to Seoul's central business districts such as Gwanghwamun, City Hall, and Euljiro, and along with Mayongseong, are considered areas with high proximity between residence and workplace in the northern Seoul region. Since the implementation of the new lease protection law in July, including the right to request contract renewal and the cap on rent increases, the jeonse shortage has intensified. As the 1 billion KRW era for Mayongseong jeonse prices opened, Dongdaemun and Seodaemun districts have followed suit in price matching, leading to a surge in record-high prices. In Mapo-gu, a 84.96㎡ unit in Hyunseok-dong's Raemian Wellstream was traded for 1.05 billion KRW on the 8th of last month, which is 100 million KRW higher than the previous jeonse price. In Yongsan-gu, an 84.96㎡ unit in Ichon-dong's Hangaram was contracted for 1 billion KRW. In Seongdong-gu, a 84.99㎡ unit in Ha Wangsimni-dong's Centras was contracted for 1.02 billion KRW on the 13th of last month, and an 84.92㎡ unit in Oksu-dong's Oksu Park Hills was contracted for 1 billion KRW on the 16th.
900 million KRW, 1 billion KRW... The domino-like record-breaking jeonse prices in northern Seoul are not limited to areas near the city center. The jeonse price surge is also fierce in the outer Seoul areas of Nodogang (Nowon, Dobong, Gangbuk districts) and Geumgwan-gu (Geumcheon, Gwanak, Guro districts), where jeonse prices have been relatively affordable. In Nowon-gu, known for its excellent school districts, the 800 million KRW barrier has been broken. A 84.77㎡ unit in Cheonggu 3rd Complex, Junggye-dong, was contracted for 800 million KRW on the 24th of last month despite being 25 years old. A representative from Junggye-dong B Real Estate Agency said, "This complex is popular because it is in the Eulji Elementary School district, which is highly preferred by parents," adding, "Units on higher floors with remodeling are even listed at 890 million KRW."
Despite the announcement of the November 19th measures to stabilize the lease market, the jeonse shortage continues due to the deepening of the supply freeze caused by the new lease law. According to KB Kookmin Bank, the average jeonse price for housing in Seoul rose by 2.39% last month compared to the previous month, marking the highest increase in 18 years and 8 months since March 2002.
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