Seoul Sale and Jeonse Prices Rise Together... Jeonse Price Increase Rate Is Higher

Real Estate 114, This Week's Seoul Real Estate Market Trends

[Asia Economy Reporter Kim Hyemin] Seoul apartment sale and jeonse prices are showing simultaneous strength. It is the first time in about three months since March this year that both have recorded an increase rate of over 0.1% compared to the previous week. In particular, due to the impact of reconstruction relocation demand in the Gangnam area and an overall decrease in supply, jeonse prices rose at a higher rate than sale prices.

According to Real Estate 114 on the 19th, the weekly change rate of Seoul apartment sale prices rose by 0.1% compared to the previous week. General apartments increased by 0.1%, and reconstruction apartments rose by 0.08%.

In Seoul, Nowon-gu showed the highest increase rate, rising 0.3% compared to the previous week. Nowon has recorded the largest increase among the 25 districts of Seoul for four consecutive weeks. Real Estate 114 analyzed, "This is because there is a concentration of old apartments built in the late 1980s, raising expectations for reconstruction projects." Following were ▲Mapo (0.2%) ▲Guro (0.14%) ▲Dongjak (0.14%) ▲Eunpyeong (0.14%) ▲Dobong (0.12%) ▲Seongdong (0.12%).

New towns rose by 0.08% compared to the previous week. Ilsan increased the most by 0.17%, followed by ▲Dongtan (0.12%) ▲Pangyo (0.1%) ▲Sanbon (0.09%) ▲Pyeongchon (0.08%). Incheon and Gyeonggi rose by 0.09%, with ▲Uiwang (0.25%) ▲Pyeongtaek (0.22%) ▲Siheung (0.2%) in order. Uiwang is leading the market with expectations for the establishment of a GTX station.

In Seoul, jeonse prices rose by 0.11% compared to the previous week, surpassing the sale price increase rate. It is the first time in about four months since February this year that jeonse prices showed a higher change rate. Among the 25 autonomous districts, 15 showed a change rate of over 0.1%, clearly indicating strength. Real Estate 114 said, "Despite the moving off-season ahead of the summer vacation season, the reconstruction relocation demand in some Gangnam areas, along with a decrease in move-ins and the effect of jeonse turning into monthly rent, continues." By region, the increases were ▲Nowon (0.17%) ▲Dongjak (0.17%) ▲Gwanak (0.16%) ▲Seocho (0.15%).

Jeonse prices in Gyeonggi and Incheon rose by 0.06% compared to the previous week, and new towns rose by 0.02%.

Yoon Jihae, chief researcher at Real Estate 114, said, "After the holding tax taxation reference date (June 1), some multi-homeowners have withheld their properties, and the upward trend of major price indicators is strengthening. As the instability of the jeonse and monthly rent market, which is a leading indicator of sales, intensifies, non-homeowning tenants are moving to sales and chasing purchases, but due to increased taxes, multi-homeowners have no incentive to put properties on the market."

She added, "As supply decreases, various development policies such as the government's easing of loan regulations for real demanders, pre-subscription for new towns, and revitalization of maintenance projects are being announced, so the seller's market is expected to continue for the time being."