Impact of Stronger Owner-Occupation Rules... Last Year’s Jeonse Price Growth in Seoul Hits 5-Year High

Jeonse transaction prices up 5.6% last year... Double the previous year

Seoul apartment transaction prices rise 13.49%

6,450 land transaction permit applications filed last month

Upward trend in application prices slows

Yonhap News Agency

In December last year, the actual transaction prices for apartment sales in Seoul rose by 13.49% year-on-year. Compared to the previous month, they increased by 0.35%.

According to the Seoul Metropolitan Government on the 23rd, actual transaction prices for apartments in Seoul peaked in October 2021 and then fell through December 2022, but have been steadily rising again since 2023 up to now.

In particular, the southeastern area (Seocho, Gangnam, Songpa, and Gangdong), where demand is concentrated on securing one high-quality unit, led the rise in the overall Seoul index, with prices up 1.43% from the previous month and 23.01% from a year earlier.

By size, very small units (40 square meters or less) showed the most pronounced increase, recording a rise of 0.94%.

In December last year, the actual transaction prices for Jeonse (lump-sum deposit leases) for Seoul apartments rose by 0.56% compared to the previous month. The northeastern area (Gangbuk, Dobong, Nowon, Seongbuk, Jungnang, Dongdaemun, Seongdong, and Gwangjin) recorded the highest growth rate, with a 1.01% increase from the previous month.

The annual Jeonse price growth rate last year was 5.6%, more than double the 2.7% increase recorded in 2024. This is the highest growth rate in the past five years. It appears to reflect a sharp decline in the supply of Jeonse listings due to a series of government regulatory tightening measures, including mandatory owner-occupation requirements, implemented last year.

Increase in land transaction permit applications... Application prices also rise 1.80%

As of last month, the number of new applications for land transaction permits for apartments totaled 6,450, up 33.6% from the previous month. The number of cases processed in January was 5,262, and these will subsequently lead to contracts and be reflected in reported sales transaction volumes.

By the end of last month, cumulative applications reached 16,383, of which 13,076 had been processed.

The prices stated in land transaction permit applications received from January 1 to 31 rose by 1.80% compared with December last year. Although this is a slower increase than the 2.31% rise in December, application prices continue to trend upward.

By area, the three Gangnam districts (Gangnam, Seocho, and Songpa) and Yongsan District posted a 2.78% increase, while the seven districts in the Han River Belt (Gwangjin, Seongdong, Mapo, Dongjak, Yangcheon, Yeongdeungpo, and Gangdong) recorded a 1.89% rise, both higher than the overall Seoul average.

Ten districts in northern Seoul (Jongno, Jung, Gangbuk, Nowon, Dobong, Dongdaemun, Seongbuk, Jungnang, Seodaemun, and Eunpyeong) and four districts in southern Seoul (Gangseo, Gwanak, Guro, and Geumcheon) showed relatively lower increases than the citywide average, at 1.50% and 1.53%, respectively. In these areas, the number of permit applications for apartments priced at 1.5 billion won or less, regardless of size, came to 4,064, up 40% from the previous month.

Meanwhile, to minimize the information gap during the land transaction permit period prior to housing contracts, the Seoul Metropolitan Government has, since last month, been releasing on a monthly basis both the status of land transaction permit applications aggregated by each district office and the trends in the actual transaction price index published by the Korea Real Estate Board.