"Listings Down 30%"... Is a Jeonse Crisis Looming Ahead of the Spring Moving Season? [Real Estate AtoZ]

Seoul Apartment Jeonse Prices
Also Rise for 30 Consecutive Months

Yonhap News Agency

As the supply of jeonse rental listings in Seoul has dropped sharply, concerns are growing about a potential jeonse crisis ahead of the spring moving season. The number of jeonse listings in Seoul has fallen by more than 30% year-on-year, with the decline particularly pronounced in outer areas of Seoul where jeonse deposits are relatively less burdensome.

Jeonse listings continue to decrease

According to real estate big data platform Asil on the 16th, there were 19,808 apartment jeonse listings in Seoul, down 32.2% from 29,175 a year earlier.

By district, the decline in jeonse properties was especially notable in non-Gangnam and outer Seoul areas where lease demand is high, such as Seongbuk District (-90.8%), Gwanak District (-77.6%), Dongdaemun District (-72.3%), Jungnang District (-70.6%), Gangdong District (-69.8%), Gwangjin District (-68.6%), Nowon District (-65.9%), and Dobong District (-65.7%).

The 6·27 lending regulations and the 10·15 real estate measures are cited as the main reasons for the drop in jeonse supply. Under the loan regulations, jeonse loans with ownership transfer as a condition have been banned, and when using mortgage loans, tenants are now required to file a move-in report within six months. In addition, on October 15 last year, the entire city of Seoul was designated as a land transaction permit zone, making "gap investment" impossible and causing jeonse listings to become scarce.

With the end of the heavy capital gains tax on multi-homeowners scheduled for May 9, rental listings are also expected to keep decreasing once multi-homeowners begin selling off their properties in earnest. On top of this, the government is pushing measures to impose limits on capital gains tax reduction benefits for registered apartment rental business operators.

Yonhap News

Seoul apartment jeonse prices rise for 30 consecutive months

Due to the drop in supply, jeonse prices have been soaring every month. According to KB Real Estate, the average jeonse price for apartments in Seoul stood at 669.48 million won as of last month. This marks 30 consecutive months of increases since August 2023, when the average was 571.31 million won.

This trend is also evident in the jeonse price index. According to the Korea Real Estate Board, as of the 9th of this month, apartment jeonse prices were up 0.08% from the previous week.

In Seoul (up 0.11%), overall prices rose as the spring moving season approaches, with a shortage of listings and an increase in tenant inquiries, rising transactions centered on large complexes near subway stations, and continued demand near popular school districts. Nowon District (up 0.28%) saw the highest jeonse price growth, led by areas near subway stations in Wolgye-dong and Junggye-dong, while Seocho District (up 0.22%), Seongbuk District (up 0.21%), Seongdong District (up 0.18%), and Dongjak District (up 0.17%) also outpaced the Seoul average.

Lee Eunhyeong, a research fellow at the Korea Institute of Construction Policy, said, "There is a possibility that the jeonse market's upward trend will continue due to the tightening of regulations on multi-homeowners and rising sale prices," but added, "If the multi-homeowners' properties are all absorbed by the market in a short period of time, the disappearance of private jeonse could lead to a jeonse crisis, although that possibility still appears low."