"Precious Jeonse, Price Rises When Called"... Hanam Soars 200 Million Won Due to Pre-Subscription Demand

Rapid Surge After May Pre-Subscription Announcement
Hanam, Namyangju See 'Jeonse Zero' Cases Surge
Hanam Pungsan-dong 30-Pyeong New Building Nears 900 Million Won
"To Maintain No Home Ownership Until Move-In, Rental Market Unstable for at Least 4 Years"

[Image source=Yonhap News]

[Asia Economy Reporters Onyu Lim, Chunhee Lee] "They are already 'precious jeonse tenants.' Now, the price is whatever you call for." (Hanam City A Real Estate Agency (hereafter, Agency) representative)

After the government announced the preliminary subscription schedule for 60,000 households in public housing sites in the metropolitan area, the jeonse market around the planned 3rd New Towns such as Hanam was literally in chaos. Demand for listings continues, but there are no properties to broker. In some areas, complexes with no jeonse listings at all are appearing one after another.

The representative of Hanam City A Agency said, "Even Seoul jeonse refugees have come flooding in, and many people are looking, but the lease law and preliminary subscription waiting demand have completely blocked the listings," adding, "The jeonse price for newly built 30-pyeong units is approaching 900 million KRW."

Hanam and Namyangju See 'Zero Jeonse' Cases

On the 9th, Asia Economy surveyed agencies in Gyeonggi Province areas where 3rd New Towns such as Hanam Gyosan, Namyangju Wangsuk, and Bucheon Daejang are being developed, and found the shortage of jeonse listings to be severe.

Especially, Hanam, which has excellent access to Gangnam and is highly preferred by prospective subscribers, is experiencing the worst jeonse shortage. In Pungsan-dong, near Misa Station on Subway Line 5, Misa Riverside Central Xi (1,222 households) had only two jeonse listings. Even Hanam Xi, the largest complex in Deokpung-dong with 875 households, had only one listing for a 125㎡ (exclusive area) unit. There were also zero-jeonse complexes. Pungsan I-Park Phase 1, with 686 households, currently has no jeonse listings available for transaction.

A representative of Pungsan-dong B Agency explained, "The preliminary subscription schedule for Gyosan District has been confirmed this time, but quick prospective subscribers have already moved into this area, so there are almost no properties currently available."

The situation was similar in Namyangju, where preliminary subscriptions for Wangsuk 1 and 2 districts will be held from September to December next year. Even large complexes mostly have fewer than ten jeonse listings. In Dasan New Town, for example, checking listings in complexes with over 1,000 households such as Jayeon & Ipyunhansesang (1,615 households), Bando Yubora Maple Town (1,261 households), Dasan Jayeon & Lotte Castle (1,186 households), and Booyoung Green Town (1,086 households) revealed only 2 to 6 jeonse listings per complex. According to Asil, jeonse listings in Namyangju have sharply decreased from about 1,000 in May to around 600 currently. A representative of C Agency in this area said, "Jeonse has become difficult to find since the preliminary subscription was announced, and now even half-jeonse that matches the price and timing is hard to find."

A representative of D Agency near Bucheon Daejang District also said, "Since the 3rd New Town was confirmed, it has already become difficult to find jeonse," adding, "Although the preliminary subscription period has been announced and we are receiving inquiries, we have no listings to introduce, which is frustrating."

'Price is Whatever You Call'... Did Advancing the Sale Date Backfire?

The jeonse shortage is leading to a sharp rise in jeonse prices. According to the Korea Real Estate Agency's weekly apartment trend report, jeonse prices in Hanam City have risen for 60 consecutive weeks since the third week of July last year. Especially, the increase rate in the second week of July was 0.93%, more than six times the national average of 0.14%. Based on actual transaction prices, the jeonse price for a 91㎡ unit in Pungsan-dong Misa Riverside Central Xi rose from 545 million KRW in May to 700 million KRW last month. The 84㎡ unit in Seondong Misa Riverside Centriver jumped from 470 million KRW in April to 665 million KRW last month. Jeonse prices in Namyangju have also been rising for 24 consecutive weeks since the fourth week of March. The increase rate in the third week of August was 0.58%, showing a steep upward trend recently.

The background behind this situation lies in the current subscription system's characteristics. It is naturally advantageous to live in the relevant basic local government area for new towns in the Gyeonggi area. Currently, in speculative overheated zones or areas over 660,000㎡ in Gyeonggi, 30% of the general supply is preferentially allocated to those who have lived in the relevant basic local government area for more than two years. The remaining 70% is allocated 20% to other Gyeonggi residents and 50% to other metropolitan area residents. Unlike Seoul and Incheon, which allocate 50% preferentially by metropolitan area and 50% to the rest of the metropolitan area, considering the number of applicants and allocated households, residents of the relevant area have overwhelmingly higher chances of winning. In fact, in Gwacheon Knowledge Information Town, the competition rate gap between the relevant area (Gwacheon City) and other Gyeonggi or metropolitan areas reached about 20 times.

The government predicted that the rise in jeonse prices due to preliminary subscriptions would be 'limited.' Kim Heung-jin, Director of the Housing and Land Office at the Ministry of Land, Infrastructure and Transport, said, "Since the main subscription period is about two years, it would be awkward to move right before the preliminary subscription to get the subscription." However, the market and experts have different expectations. Park Won-gap, Senior Real Estate Specialist at KB Kookmin Bank, analyzed, "As waiting demand for subscriptions increases, the sales market centered on mid-to-low priced housing in the metropolitan area may stabilize, but the jeonse market could become somewhat unstable." Ham Young-jin, Head of the Big Data Lab at Zigbang, said, "Considering that one must remain without a home until moving in after the preliminary subscription, they will have to stay in the rental market for at least four years," adding, "The supply next year will also be limited, so it inevitably puts pressure on the lease market."

This content was produced with the assistance of AI translation services.