President Says Jeonse Prices Are Not Surging... Indicators Show 2015 Crisis Levels [Real Estate AtoZ]

Korea Real Estate Board Releases Weekly Apartment Price Trends for Second Week of June
Seoul Jeonse Prices Up 0.32% From Previous Week, Highest Since October 2015
Dongtan Apartment Sales Prices Jump 1.98% in Just One Week

The increase in apartment jeonse prices in Seoul has widened for the third consecutive week. The current rate of increase is higher than in previous years, and the pace has been accelerating recently. Although President Lee Jaemyung commented at his recent first anniversary press conference that "statistically, (jeonse prices) have not skyrocketed," current indicators are approaching the levels seen during the surge in the autumn of 2015. With no signs of improvement in jeonse supply-demand conditions, there is little likelihood that this upward trend will subside any time soon.

According to weekly apartment price trend data released by the Korea Real Estate Board on June 11, jeonse prices for Seoul apartments in the second week of June (as of June 8) rose by 0.32% compared to the previous week. This marks the largest weekly increase since the fourth week of October 2015 (as of October 26, 0.33%), based on weekly increases tracked by the Korea Real Estate Board.

Seoul apartment jeonse prices have been steadily rising for approximately 17 months since early last year. Recently, this upward momentum has become even steeper. Over the past three weeks, weekly increases have remained high at 0.29%, 0.26%, and 0.29%, respectively. The cumulative increase so far this year stands at 4.11%, which is nearly six times higher than the 0.73% recorded during the same period last year.

Yonhap News Agency

By district, Seongdong-gu saw the largest increase at 0.64%, primarily in major complexes in Haengdang-dong and Oksu-dong. Dobong-gu (0.55%), Songpa-gu (0.53%), and Gangbuk-gu (0.49%) also posted significant gains. The average increase across 14 districts in northern Seoul was 0.38%, surpassing the 0.27% recorded in 11 districts in southern Seoul. The Korea Real Estate Board explained, "With strong demand for jeonse continuing, there has been an uptick in lease inquiries. As demand accumulates for major complexes, such as those near subway stations or large-scale developments with good residential environments, contracts at higher prices are being signed, resulting in price increases across all of Seoul."

The current pace of jeonse price increases is similar to that of September to November 2015, a period of rapid price surges. At that time, a cut in the base interest rate accelerated the shift to monthly rentals in the housing lease market, leading to a reduction in jeonse supply. Meanwhile, redevelopment and reconstruction projects throughout Seoul drove up demolition and relocation demand, causing jeonse prices to climb steeply. Weekly increases at that time were also in the low 0.30% range. The current situation is essentially a repeat of those circumstances.

Although the rate of increase is lower than that of jeonse prices, the Seoul apartment sales price index also rose by 0.27% from the previous week, indicating a trend of simultaneous increases in both sales and lease prices. While some areas remain cautious, the Korea Real Estate Board noted that price increases have been centered mainly on complexes undergoing redevelopment or reconstruction and on large-scale developments. Gangseo-gu posted the highest increase at 0.42%, followed by Guro-gu (0.40%), Dongdaemun-gu (0.39%), and Dobong-gu (0.39%). In the Gyeonggi region, the sales price index for Dongtan in Hwaseong surged by 1.98% from the previous week—more than triple last week's increase of 0.60%.

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