"Listings Down 50%" After Seoul, Gyeonggi Also Faces a Dried-Up Jeonse Market [Real Estate AtoZ]

Following Seoul, the jeonse shortage is worsening in major areas of Gyeonggi Province as well. The number of apartment jeonse listings in Gyeonggi has fallen by nearly 50% compared with a year ago. With jeonse prices continuing to rise, tenants are expected to face even greater hardship.

After Seoul, jeonse 'disappears' in Gyeonggi Province

According to real estate big data platform Asil on the 21st, there were 14,858 apartment jeonse listings in Gyeonggi Province, down 48.7% from 28,918 a year earlier.

The decline in listings is more severe in the southern part of Gyeonggi Province, where housing demand is high. In Jungwon District of Seongnam, jeonse listings plunged 86.6%, while Manan District of Anyang saw an 85.5% drop, and Cheoin District of Yongin fell 76.7% from a year earlier. Jeonse listings also fell sharply in Dongan District of Anyang (-72.9%), Gwonseon District of Suwon (-68.5%), and Suji District of Yongin (-68.0%).

In Seoul, there were 19,171 apartment jeonse listings, down 33.8% from 28,921 a year earlier.

By district, the decline in jeonse properties was particularly pronounced in non-Gangnam areas and on the outskirts of Seoul, where lease demand is strong: Seongbuk District (-90.5%), Gwanak District (-78.3%), Jungnang District (-72.2%), Dongdaemun District (-71.3%), Gangdong District (-69.8%), Nowon District (-69.4%), Gwangjin District (-69.1%), and Gangbuk District (-64.6%).

The main reasons cited for the decrease in jeonse properties are the June 27 lending regulations and the October 15 real estate measures. The lending regulations banned jeonse loans that are conditional on transfer of ownership, and imposed an obligation to file a move-in report within six months when using mortgage loans. On October 15 last year, all of Seoul was designated as a land transaction permit zone, making "gap investment" impossible and causing jeonse listings to become scarce.

In particular, President Lee Jaemyung has continued to make hardline remarks on real estate through X (X, formerly Twitter), which is further dampening the jeonse market. Ahead of the end of heavy capital gains tax on multi-homeowners on May 9, if sales of homes by multi-homeowners begin in earnest, the number of lease properties could continue to decline. In addition, the government, after limiting capital gains tax relief for registered apartment rental business operators, is also reviewing measures to restrict loan extensions.

Yonhap News Agency

Apartment jeonse prices continue to rise

Due to the drop in supply, jeonse prices are also on an upward trend. According to KB Real Estate, as of last month the average jeonse price for apartments in Seoul was 669.48 million won. This is an increase of 36.81 million won from January last year (632.67 million won), and it has been rising for 30 consecutive months since August 2023.

This trend is also evident in the change rate of the jeonse price index. According to the Korea Real Estate Board, as of the 16th, average apartment jeonse prices nationwide rose 0.07%.

In Gyeonggi Province, apartment jeonse prices rose 0.11%, with the pace of increase accelerating from the previous week (0.10%). The rise was steep in major residential areas in southern Gyeonggi such as Yeongtong District in Suwon (0.40%), Dongan District in Anyang (0.19%), Bundang District in Seongnam (0.18%), and Suji District in Yongin (0.18%).

In Seoul, the rate of increase narrowed (from 0.11% to 0.08%), but overall prices still went up as lease demand remained strong in preferred large complexes, particularly those near subway stations, even as the supply of jeonse listings continued to decline.

In Nowon District (0.21%), jeonse prices rose sharply mainly in older complexes in Sanggye-dong and Junggye-dong, while in Seongdong District (0.20%), large complexes in Hawangsimni-dong and Oksu-dong led the gains. Seongbuk District (0.15%), Gangbuk District (0.15%), and Dongdaemun District (0.14%) also posted notable increases.

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