Samsung-dong 'Hillstate 1 Complex'
Prime Gangnam Area Properties Surpass 100 Million Won One After Another
In Seoul, apartments with average jeonse prices exceeding 100 million KRW per 3.3㎡ are emerging one after another.
According to real estate information provider Economy Man Lab and the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system on the 23rd, a jeonse contract was signed on the 5th of last month for a 31.402㎡ (exclusive area) apartment in Hills State 1 Complex, Samseong-dong, Gangnam-gu, Seoul, with a deposit of 1.26 billion KRW (6th floor). The jeonse price converted per 3.3㎡ reached 132.64 million KRW, confirming the highest amount ever recorded.
Besides this apartment, cases where the jeonse price per 3.3㎡ exceeds 100 million KRW have been continuously reported in prime apartments in the Gangnam area. Brunnen Cheongdam in Cheongdam-dong, Gangnam-gu recorded 106.71 million KRW, Acro River Park in Banpo-dong, Seocho-gu was contracted at 102.01 million KRW, and Acro Riverview Sinbanpo in Jamwon-dong, Seocho-gu was signed at 101.07 million KRW per 3.3㎡. In the case of Brunnen Cheongdam, a large unit of 219.96㎡ was jeonse contracted in February this year with a deposit of 7.1 billion KRW (5th floor), marking the highest deposit ever recorded. In the northern part of Seoul, Trimage in Seongsu-dong 1-ga, Seongdong-gu was jeonse contracted at 99.84 million KRW per 3.3㎡, nearly breaking the 100 million KRW mark.
In addition to these ultra-high jeonse prices, jeonse prices for apartments in major areas of Seoul are soaring sky-high. According to KB Live Real Estate Housing Price Trends, the average jeonse price per 3.3㎡ in Gangnam-gu last month was 40.24 million KRW. This price, which was 25 million KRW at the start of the current government, has risen by 60% in four years. Gangnam-gu was ranked as the area with the highest increase in jeonse prices nationwide over the past four years. Seongdong-gu also reached 27.01 million KRW per 3.3㎡ last month.
The sharp decrease in jeonse supply since the implementation of the new lease law, which includes the right to request contract renewal and the cap on monthly rent and jeonse prices at the end of July last year, is also cited as a reason for the surge in high-priced jeonse transactions. Experts evaluate that since demand is overflowing during the shortage of listings and a seller's market has formed, price increases are likely to continue.
As jeonse prices soar, ultra-high monthly rent transactions are also following suit. It is analyzed that landlords are significantly increasing the proportion and amount of monthly rent to reduce tax burdens such as comprehensive real estate tax (종부세). Also, tenants who cannot afford the jeonse deposit are increasingly converting part of the deposit into monthly rent.
An apartment in Acro Seoul Forest, Seongsu-dong 1-ga, Seongdong-gu, with an area of 264.546㎡, was contracted on July 30 with a deposit of 2 billion KRW and a monthly rent of 27 million KRW (47th floor). This is the highest monthly rent ever recorded, comparable to the average annual salary (28.52 million KRW) of a first-year university graduate working at a small or medium-sized company last year.
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