Last Year's Highest Jeonse Price Increase Was in Hanam... Rose by 50.2%

Rising Jeonse Prices Nationwide Following New Lease Law Implementation
2nd Place: Sejong City, 3rd Place: Gwangmyeong City

[Asia Economy Reporter Onyu Lim] Due to the implementation of the new lease protection law, including the right to request contract renewal and the cap on monthly rent increases, the average nationwide apartment jeonse (long-term deposit lease) price rose by more than 17% last year. In particular, Hanam City in Gyeonggi Province, which has high accessibility to Seoul, recorded a 50% increase.

On the 13th, Economic Man Lab, a real estate information provider, reviewed KB Real Estate's housing price trends and found that the average nationwide apartment jeonse price per 3.3㎡ was about 9,522,000 KRW in January last year, but rose to 11,169,000 KRW in December.

The area with the steepest rise in jeonse prices nationwide was Hanam City. With the opening of the first phase of the Hanam Line extension of Subway Line 5, accessibility to Seoul improved, leading to a 50.2% increase in jeonse prices. In January last year, the average apartment jeonse price per 3.3㎡ in Hanam City was 11,685,000 KRW, but it rose to 17,554,000 KRW in December.

The second highest was Sejong City. When politicians mentioned the 'Sejong relocation theory' to curb Seoul apartment prices, not only land prices but also jeonse prices increased. The average apartment jeonse price per 3.3㎡ in Sejong City was 5,817,000 KRW in January last year, rising 46.4% to 8,513,000 KRW in December.

The third was Gwangmyeong City in Gyeonggi Province. In January last year, the average apartment jeonse price per 3.3㎡ in Gwangmyeong City was 14,179,000 KRW, which rose 39.7% to 19,815,000 KRW in December.

Following were Hwaseong City, Yongin City, Seongnam City, Namyangju City, Guri City in Gyeonggi Province, and Seongbuk-gu in Seoul.

Despite the government announcing its 24th real estate measure last year, both nationwide apartment land prices and jeonse prices rose, increasing housing instability for ordinary citizens. Especially with the new lease protection law in effect, a shortage of jeonse listings has emerged, accelerating the rise in jeonse prices. While existing tenants can extend their lease contracts for two more years at a lower price due to the introduction of the right to request contract renewal, new tenants face difficulties finding jeonse homes due to the reduced supply, and prices have soared, causing growing concerns.

Hwang Hansol, a research fellow at Economic Man Lab, said, “Due to the shortage of jeonse listings caused by the right to request contract renewal and the reduced supply of apartment move-in volumes in Seoul this year, the jeonse shortage caused by supply-demand imbalance may continue for the time being.”