Actual Transactions Dropping Up to 200 Million Won from Previous Highs
Increase in Listings in Nearby Areas Like Gamil and Helios City Cited as Cause
[Asia Economy Reporter Ryu Tae-min] The apartment jeonse prices in Seoul's Gangdong-gu and Wirye New Town, which soared to unprecedented heights last year due to a shortage of listings, have recently dropped sharply, drawing attention. This is attributed to the effect of large-scale complex move-ins occurring consecutively nearby.
According to the Ministry of Land, Infrastructure and Transport's actual transaction price system on the 18th, the actual jeonse transaction price for an 84㎡ (exclusive area) unit in 'Godeok Gracium' in Godeok-dong, Gangdong-gu, fell by 200 million KRW in one month, from 1 billion KRW in December last year to 800 million KRW last month. Jeonse prices in Wirye New Town are also on a downward trend. An 84㎡ unit in 'Wirye 24 Complex Kkumegreen' signed a jeonse contract for 1 billion KRW in December last year, but the price dropped to 880 million KRW last month. Similarly sized units in 'Wirye Jayeon & Central Xi' were traded for 900 million KRW in November last year, but a jeonse contract was signed for 760 million KRW on the 6th of this month.
The decline in jeonse prices for these apartments is analyzed to be due to an increase in jeonse listings in nearby areas such as Hanam Gam-il District and Seoul Songpa-gu. In Gam-il District, 'Hanam The Sharp Powell City' with 881 households and 'Powell City Prugio' with 790 households began move-ins on the 8th and 15th respectively. In the case of Wirye New Town, the nearby Songpa-gu Garak-dong 'Helio City,' the largest single complex with 9,510 households, entered its second year of move-ins in December last year, flooding the market with rental listings, which appears to have dispersed jeonse demand. In Wirye New Town, 'Hillstate Bukwirye' (1,078 households) and 'Wirye Foret Xi Apartment' (558 households) are scheduled for move-ins in May, and the 1,676-household 'Wirye Fore Shine 15·17 Complex' is expected to begin move-ins in August. The representative of Wirye New Town A Real Estate Agency said, "Since the end of last year, jeonse listings have been accumulating as rental and move-in volumes flood the nearby area."
According to the weekly apartment price trend by the Korea Real Estate Board, the jeonse price increase rate for apartments in Hanam City recorded a negative -0.14% as of the second week of February. During the same period, Gangdong-gu (0.23% → 0.07%) and Songpa-gu (0.21% → 0.14%) also showed signs of slowing growth.
Lim Byung-chul, senior researcher at Real Estate 114, explained, "The jeonse market immediately reflects supply and demand conditions, so when volumes flood in, the jeonse prices in adjacent areas are directly affected." He added, "However, as the weather warms and the moving season arrives, jeonse demand is likely to increase again, so it is necessary to observe the situation further."
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