Rents Jump Up to 200 Million Won in Six Months... Gangnam Villa District on Edge as 6,000 Households Prepare to Move

Villa Jeonse Prices in Daechi School District Rise by 100 Million Won in Six Months; Renewals Jump by 200 Million Won
Villa Jeonse Prices Also Surged During Past Relocations from Godeok Jugong and Shinbanpo

Jeonse and monthly rental prices for row houses and multi-unit homes in Daechi-dong and Gaepo-dong, Gangnam-gu, Seoul, have risen by as much as around 200 million won in six months. With a total of more than 6,000 households in Eunma Apartment (4,424 households) and Gaepo Jugong Complexes 6 and 7 (1,960 households) planning to relocate next year, the move is expected to further fuel rental market uncertainty in the area.

Villa-dense area in Daechi-dong, Gangnam-gu, Seoul. Naver Street View

According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system on October 31, deposits in the row-house and multi-unit home market in Daechi-dong, Gangnam-gu—a school district served by Daehyun Elementary School and Whimoon Middle School—have jumped by tens of millions to hundreds of millions of won in a short period, even before relocations begin. A new jeonse contract for a 69.9-square-meter unit at Hanti Village in Daechi-dong was signed for 550 million won on March 10 for a unit in Building B on the fourth floor. But a new contract for a unit in Building A on the second floor was signed for 650 million won on September 28, an increase of 100 million won, or 18.2%, in six months. The jeonse price for a 58.52-square-meter unit at Stone Village Daechi 2 rose from 630 million won for a new contract on February 23 to 798 million won for a renewal on July 31, just short of 800 million won. The previous contract was 760 million won.

Renewals agreed to by both parties, which are not subject to the jeonse and monthly rent cap limiting increases to 5% at the end of a two-year lease, saw steeper increases. A 100.94-square-meter unit at Dongsan Villa in Daechi-dong was re-leased for 650 million won on May 27, up 200 million won, or 44.4%, from the previous 450 million won, without the tenant exercising the right to request a contract renewal. A 39.77-square-meter multi-unit home in Daechi-dong also had its lease extended on May 4 for 438 million won, an increase of 70 million won, or 19%, from the previous 368 million won.

Jeonse units in nearby newly built apartments that Eunma Apartment tenants might move into have already all but disappeared from the market. Daechi Prugio Summit, near Daehyun Elementary School and Whimoon Middle School and occupied in 2023, recorded just three jeonse transactions in the two-month period from September 1, the start of the fall moving season, through October 28.

With jeonse listings vanishing, monthly rentals accounted for 644 of the 896 jeonse and monthly rental transactions for row houses and multi-unit homes in Daechi-dong from the start of this year through October 28, or 71.9%. Units measuring 47.78 to 48.23 square meters at Daechi Myeongmunga were each leased three times—in January, March, and June—for a deposit of 50 million won and monthly rent of 3 million won. A new contract for a 92.58-square-meter unit at Seowon Tel was signed on August 12 for a deposit of 50 million won and monthly rent of 3.3 million won.

Local real estate agents expect demand for villas to surge further once official relocation notices are issued. The head of a real estate agency near Eunma Apartment said, "It is still relatively quiet because relocation has not begun, but Eunma Apartment has had many tenants because its jeonse prices are lower than those in the surrounding area. Once relocation begins, tenants who cannot move far away because of the school district are likely to move into villas in Daechi-dong or Gaepo-dong."

There have been past cases in which large-scale demolitions pushed up prices for non-apartment homes in nearby areas. In Gangdong-gu, residents of Godeok Jugong Complex 4 (410 households) began relocating in December 2014, followed by residents of Samick Green Complex 1 in Myeongil-dong (1,560 households) in February 2015 and Godeok Jugong Complex 2 (2,600 households) in March. As listings were quickly snapped up, the average jeonse price for villas in Gangdong-gu rose from 157.61 million won in October 2014 to 190.1 million won in June 2015.

Experts warn that once relocations from large apartment complexes in Gangnam begin amid a shortage of new housing, tenants could be pushed out in a chain reaction based on their financial means. Members of reconstruction cooperatives can move elsewhere using relocation loans and may benefit from future increases in asset values. But tenants who must vacate their homes within a year without relocation assistance have to fend for themselves.

Ko Jong-wan, head of the Korea Asset Management Research Institute, said, "If tenants who cannot move far away because of their proximity to work and their children's education flock to nearby row houses and multi-unit homes, a relocation crisis could drive up jeonse and monthly rental prices. With no vacant homes available, tenants from large apartment complexes will move into the villa market, forcing existing villa tenants out to the outskirts because they cannot compete financially."

Park Won-gap, senior real estate expert at KB Kookmin Bank, said, "Housing prices are so high these days that even homeowners in reconstruction projects do not buy another home when relocating. Instead, they enter the surrounding jeonse market until they can move into their new apartments. Because relocation demand stays within the neighborhood, rising jeonse prices could spread to nearby multi-unit homes, multifamily houses, and lower- to mid-priced apartments, making the area another epicenter of jeonse market instability."

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