Jeonse Listings Increase But... "Jeonse Prices Will Rise Next Year" [Real Estate AtoZ]

Seoul Apartment Jeonse Listings Increase from 26,000 to 33,000 Units
Listings Grow Mainly in Dongdaemun, Seongdong, and Gangdong Districts
Seoul Apartment Jeonse Price Increase Rate Drops from 0.86% to 0.21%
"Jeonse Prices Expected to Rise Due to Shortage of Move-in Supply Compared to Previous Years"

Apartment complex in Banpo-dong, Seocho-gu, Seoul. Photo by Yonhap News

The rate of increase in Seoul's jeonse prices slowed this month, and the number of listings increased mainly in areas with upcoming apartment complexes. However, forecasts suggest that jeonse prices will rise even more next year. Although the number of listings is growing, it remains below the levels of previous years, making it difficult for prices to drop, according to analyses.

Seoul Apartment Jeonse Listings Increase from 26,000 to 33,000 Units... Mainly in Areas with Upcoming New Complexes

According to the real estate big data platform 'Asil' on the 23rd, the number of jeonse listings for Seoul apartments was counted at 32,687 units as of the 20th of this month. This is 6,000 more units than in August (26,539 units). Jeonse listings have been steadily accumulating since August.

There were many listings in Dongdaemun, Seongdong, and Gangdong districts. The number of apartment listings in Dongdaemun-gu increased more than threefold from 465 units in August to 1,611 units this month. Following that, Seongdong-gu's listings rose from 823 units to 1,609 units, and Gangdong-gu's listings increased from 3,647 units to 4,132 units during the same period.

Jeonse listings surged ahead of the move-in of newly built apartments. The jeonse listings for 'Raemian La Grande' in Imun-dong, Dongdaemun-gu, which is scheduled for move-in in January next year, first appeared on August 24. Starting with 74 units, the listings accumulated to 875 units this month, accounting for 95.7% of the jeonse listings in Imun-dong, Dongdaemun-gu.

In Seongdong-gu, 'Seoul Forest I-Park Riverfore 1st Phase' in Seongsu-dong is scheduled for move-in in January next year. Jeonse listings were first registered on September 26. At that time, there were 7 jeonse listings, which increased to 321 units this month.

In Gangdong-gu, there were many jeonse listings at 'Olympic Park Foreon' in Dunchon-dong, with move-ins scheduled from last month through March next year. As of August, the jeonse listings for this complex were 2,268 units, which increased to 2,780 units this month.

The rate of increase in Seoul apartment jeonse prices is also slowing down. According to the Korea Real Estate Board, the rate of increase in Seoul apartment jeonse prices peaked at 0.86% in July and then declined to 0.21% last month.

By district, Dongdaemun-gu's rate of increase slowed from 0.76% in August to just 0.11% last month. Seongdong-gu's increase rate slowed from 1.55% in July to 0.35% last month. Gangdong-gu experienced fluctuations between rises and slowdowns, with jeonse prices even dropping by 0.04% last month.

Experts: "Even if Listings Temporarily Increase, Jeonse Prices Will Rise Further"

Experts predict that although jeonse listings are accumulating in some parts of Seoul, overall Seoul apartment jeonse prices will continue to rise. Ham Young-jin, head of the Real Estate Research Lab at Woori Bank, and Kim Hyo-seon, senior real estate specialist at NH Nonghyup Bank, pointed out, "Although the number of apartment move-ins in Seoul next year will increase compared to this year, supply is still insufficient compared to previous years, making it highly likely that jeonse prices will rise."

Ham said, "Jeonse listings for upcoming complexes start appearing 3 to 6 months before move-in, and the bulk of Seoul apartment move-ins next year are concentrated in the first quarter. From the second half of next year, jeonse prices will rise again due to supply shortages." He added, "The number of apartment move-ins in Gyeonggi-do also affects Seoul's jeonse prices, and the decrease of 40,000 units in move-ins next year compared to this year is another factor driving jeonse price increases."

According to real estate information company 'Real Estate R114,' the number of Seoul apartment move-ins excluding rental units (as of the 20th) next year is 30,213 units. Of these, 32.2% (9,723 units) will move in during the first quarter of next year. Seoul apartment move-ins were 44,529 units in 2020 but have since decreased to levels between 20,000 and 30,000 units.

Kim said, "Also, as demand for purchases shifts to jeonse demand, jeonse prices may rise." He explained, "With the base interest rate lowered twice this year, jeonse loan interest rates will be lower next year than this year. In a market where the sales market remains cautious, demanders may initially flock to jeonse."