Capital Region Apartments: Increasing Areas Rise, Decreasing Areas Decline

Seoul Metropolitan Area Apartment Sale and Jeonse Price Change Rates Maintained Last Week
Minimal Change in Rates but Decline Trend with Decreases in Some Areas

Apartment viewed from Yongsan-gu, Seoul on the 5th. Photo by Jinhyung Kang aymsdream@

The upward trend in jeonse prices in Seoul and the metropolitan area has continued for 11 consecutive months until May, gradually stimulating the sales market as well. From the perspective of actual buyers, prolonged increases in jeonse prices raise concerns about purchasing a home when the jeonse lease expires.

According to the market analysis for the third week of May released by Real Estate R114 on the 17th, until the last week of April, among the 25 districts in Seoul, 9 experienced price declines and only 1 showed an increase, making the declining areas dominant. However, this week, there were 2 districts with declines and 4 with increases, resulting in more areas rising. Real Estate R114 evaluated that while the overall fluctuation rate in Seoul remains stable (0.00%) over a long period, fierce competition is ongoing in individual districts at the city and county level.

Seoul apartment sales prices have remained flat (0.00%) for the ninth consecutive week. However, only 2 districts in Seoul saw declines, which is considered a process of bottoming out. Both redevelopment and general apartments also showed no price changes, remaining flat (0.00%). New towns and Gyeonggi·Incheon areas also recorded flat (0.00%) prices. In individual Seoul districts, prices rose in Mapo (0.03%), Dongjak (0.02%), Nowon (0.02%), and Yongsan (0.01%), while Yangcheon (-0.01%) and Yeongdeungpo (-0.01%) saw decreases.

In Nowon, where mid-to-low priced apartments are concentrated, prices increased by 10 million KRW in areas such as Junggye-dong Life, Shindong-A, Cheonggu 2nd Complex, Dongjin Sinan, and Hyundai 6th Complex. All individual new towns showed flat (0.00%) prices, while Gyeonggi and Incheon areas such as Icheon (-0.04%), Ansan (-0.01%), Anyang (0.01%), and Uijeongbu (-0.01%) experienced declines, showing a dominant downward trend compared to other regions.

The jeonse market has continued its upward trend for 11 consecutive months, with Seoul, Gyeonggi·Incheon, and new towns all rising by 0.01%. As the jeonse price increase prolongs, the rise is becoming more pronounced in major areas with high residential preference compared to the past.

In individual Seoul districts, prices rose in Jung-gu (0.10%), Mapo (0.05%), Dongjak (0.05%), Nowon (0.05%), Yongsan (0.03%), Seongdong (0.02%), Yeongdeungpo (0.01%), and Guro (0.01%). In Jung-gu, the rise was influenced by a 10 million KRW increase in Aegsu Heights (2,282 households) located in Sindang-dong.

In individual new towns, prices increased in Gwanggyo (0.03%) and Bundang (0.02%). In Gyeonggi·Incheon individual areas, prices rose in Uijeongbu (0.09%), Icheon (0.05%), Ansan (0.02%), Goyang (0.02%), Incheon (0.02%), and Suwon (0.01%).

A Real Estate R114 official stated, "On the 14th, the government announced the ‘Future Policy Direction for the Orderly Soft Landing of Real Estate Project Financing (PF)’. If a PF project site is rated as a caution or at risk of insolvency, restructuring and light auctions will be used to separate the wheat from the chaff." He added, "Since concerns about PF insolvency, such as the ‘April crisis theory’ and ‘May crisis theory’, have been continuously raised in the real estate market, attention is focused on whether these concerns will be resolved early through this recent measure."