Even Gangdong-gu with 10,000 Households Moving In Sees Rent Prices Soar for 2 Consecutive Weeks... Jeonse Prices Keep Climbing

The jeonse prices in Gangdong-gu, which has the largest number of move-in units in Seoul, are showing unusual signs. This year, more than 10,000 households are moving in, and as actual demand floods in, jeonse prices are showing a slight upward trend. Experts predict that the rate of increase in jeonse prices will become steeper next year when the move-in period ends.

Seoul Gangdong-gu Olympic Park Foreon (Dunchon Jugong Reconstruction) view / Photo by Yonhap News

Jeonse Prices in Gangdong-gu Rising Despite Large Move-in Volume

According to the 'Weekly Apartment Price Trends' announced by the Korea Real Estate Board on the 31st, Seoul apartment jeonse prices rose by 0.10% in the fourth week of May (as of the 27th), maintaining the same rate of increase as the previous week. This is the highest increase rate so far this year. Also, it has been rising for 54 consecutive weeks since the fourth week of May last year. From the fourth week of January 2017 to the first week of February 2018, jeonse prices rose for 54 weeks, making this the longest continuous rise since then.

An official from the Korea Real Estate Board said, "There is a shortage of new move-in units mainly in newly built large complexes with good living conditions, but the waiting demand remains," adding, "As a result, rising transactions are occurring even in nearby older complexes, sustaining the upward trend."

Gangdong-gu has shown an upward trend over the past two weeks. Previously, the prices rose for two weeks and then fell for two weeks. Although the largest number of move-in units in Seoul flooded the jeonse market, demand is concentrated on new apartments with a floor area of 84㎡ priced between 600 million and 700 million KRW, causing jeonse prices to fluctuate. The cumulative change rate of jeonse prices in Gangdong-gu from early this year to the 27th of this month recorded -0.13%.

Ham Young-jin, head of the Real Estate Research Lab at Woori Bank, said, "This year, I recommend using the ‘right to request contract renewal,’ but if you have already used it all and need to find a new home, and if you do not prefer a specific area due to your child's school issues, I recommend Gangdong-gu," adding, "Gangdong-gu is the only place where you can find housing at a reasonable price range. It is especially a good choice for couples without children or newlyweds with young children."

The Impact of the Move-in Surge Will Not Last Long

According to Zigbang, the number of apartment move-ins in Seoul this year is estimated at 23,465 households. Of these, 16,685 households (71.7%) are concentrated in Gangdong-gu. In particular, in November, 12,032 households will move into Olympic Park Foreon (Dunchon Jugong Reconstruction). The jeonse units in this complex have been appearing early since February when the three-year mandatory residence obligation for price ceiling system complexes was deferred. More units are expected to be listed two to three months before move-in.

The downward pressure on Gangdong-gu jeonse prices derived from Olympic Park Foreon could affect the entire southeastern region, including Songpa-gu and Hanam City in Gyeonggi Province. When Helio City (a total of 9,510 households) in Garak-dong, Songpa-gu, moved in, the jeonse price for 84㎡ units dropped to the 500 million KRW range. At that time, Songpa-gu experienced a decline for about four months, and nearby Gangdong-gu saw suppressed jeonse prices for about nine months.

Experts expect this decline will not last long. The number of move-ins scheduled in Gangdong-gu next year is less than 1,000 households, about one-tenth of this year’s volume. After this year’s move-in volume is exhausted, it will be difficult for jeonse prices to fall further. Lab head Ham said, "It remains to be seen whether the cumulative change rate of Gangdong-gu jeonse prices will turn positive this year, but the situation could change from next year," adding, "The number of move-ins in Gyeonggi Province next year is expected to be around 50,000 households, only 60% of this year’s level, and Seoul and Incheon’s move-in volumes are expected to shrink in 2026, which could intensify competition for new homes."