Reversal Since December Last Year... Impact of Jeonse Fraud
Last Month's Jeonse Transactions for Row Houses and Multi-family Homes at Lowest with 3,393 Cases
In the Seoul jeonse market, the transaction volume of row houses and multi-family houses (villas) with an exclusive area of 60㎡ or less, which had shown relative strength, was surpassed by apartment transaction volume starting from December last year.
On the 7th, Station3, which operates the real estate information platform Dabang, analyzed 498,778 jeonse transactions of homes with an exclusive area of 60㎡ or less in Seoul from January 2020 to October this year (236,193 apartments and 262,585 row houses/multi-family houses). The results showed that as of December last year, apartment jeonse transaction volume exceeded that of row houses and multi-family houses. In particular, except for July this year, the proportion of apartment jeonse transactions was higher every month.
Previously, from January 2020 to November last year, the average transaction volume of row houses and multi-family houses with an exclusive area of 60㎡ or less was 6,131, accounting for 54% of the total transaction volume. During the same period, the average jeonse transaction volume of apartments with an exclusive area of 60㎡ or less was 5,155, accounting for 45.7%.
However, in December, one month later, the transaction volume of row houses and multi-family houses was 4,602, while that of apartments was 4,965, marking the first reversal in transaction volume in over three years. This was around the time when the death of Kim Daesung, known as the "Villa King" in the Hwagok-dong area of Gangseo-gu, Seoul, led to nationwide issues of jeonse fraud.
Since then, the proportion of apartment jeonse transactions with an exclusive area of 60㎡ or less was 54.8% in January 2023, 57.3% in February, 56.0% in March, 55.0% in April, 52.9% in May, 52.5% in June, 48.8% in July, 53.0% in August, 52.5% in September, and 52.3% in October. Except for July this year, the proportion remained higher than that of row houses and multi-family houses every month.
Meanwhile, the transaction volume of row houses and multi-family houses was 3,393 last month, the lowest since January 2020, according to Dabang’s analysis. This figure is 4,385 transactions (56.4%) less than the highest volume recorded in July 2021 (7,778 transactions). It also decreased by 2,342 transactions (40.8%) compared to the same month last year (5,735 transactions).
Jang Junhyuk, head of marketing at Dabang, said, "In smaller-sized homes, the proportion of jeonse transactions for row houses and multi-family houses tended to be higher than that of apartments, but unusually, since December last year, the proportion of apartment jeonse transactions has been higher for a prolonged period." He added, "This is believed to be due to the prolonged reverse jeonse issue and the avoidance of villas that have continued since the end of last year."
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