As the housing market in the metropolitan area remains stagnant, homebuyers are increasingly turning to the rental market, exacerbating the jeonse crisis in key areas of Southern Gyeonggi. Regions such as Dongtan in Hwaseong, Seongnam, and Gwangmyeong, which are experiencing significant job growth and improvements in transportation infrastructure, are showing signs of overheating, with weekly jeonse prices rising by as much as 0.7%.
According to KB Real Estate's weekly housing market trends report released on May 29, jeonse prices in the metropolitan area increased by 0.15% compared to the previous week, maintaining a steady upward trend. However, in specific regions, the increases in Southern Gyeonggi significantly outpace the average.
The highest increase was recorded in Dongtan District of Hwaseong, where weekly jeonse prices surged by 0.69%, marking the highest rate in the metropolitan area. Seongnam's Jungwon District followed with a 0.55% increase, while Gwangmyeong, benefiting from recent large-scale redevelopment projects and improved transportation networks, saw a 0.42% rise. Other areas, including Anyang's Dongan District (0.32%) and Suwon's Yeongtong District (0.30%), also exhibited strong performance, contributing to the overall rise in jeonse prices in Southern Gyeonggi.
These figures are reflected in the Ministry of Land, Infrastructure and Transport's real transaction disclosure system. A notable example is the 'Dongtan Station Lotte Castle,' where a newly listed 102 square meter unit recorded a jeonse deposit of 980 million won on May 19, setting a new record. This deposit has increased by nearly 100 million won since the beginning of the year. Similarly, 'Dongtan The Lake Palace' recently secured a contract at a deposit of 620 million won, surpassing its previous high.
The surge in jeonse prices is not limited to Dongtan. In Seongnam's Bundang District, a jeonse contract was signed for the 'Pangyo Alpharium 1 Complex' at a deposit of 1.75 billion won, an increase of 50 million won from the prior record. An agent from a brokerage in Baekhyeon-dong noted, "Tenants are expressing frustration as jeonse deposits have jumped by thousands of units within months, forcing them to consider moving to the outskirts."
The rapid rise in jeonse prices in Southern Gyeonggi is attributed to multiple factors. The supply shortage in Seoul's housing market has directly impacted Gyeonggi Province. As of April this year, the number of new apartment units in Seoul has dropped to half of what it was a year ago. This supply crunch has led tenants in Seoul to seek housing in Southern Gyeonggi's eco-friendly new towns and residential districts, which offer better living conditions and lower risks of construction delays. Additionally, some investment demand has shifted to areas outside of regulated zones, further tightening the supply and driving up prices in the rental market.
As tenants struggle to secure deposits, many are being pushed into the monthly rental market, leading to a phenomenon known as the "monthly rentification" of jeonse and a simultaneous spike in monthly rents. Particularly in the semiconductor belt of Southern Gyeonggi (including Yongin Giheung, Suwon Yeongtong, and Hwaseong Dongtan), demand for monthly rentals is rapidly increasing due to the stable housing needs of employees from large corporations.
In fact, nearby officetels and small apartments in Dongtan are predominantly listed with deposits of 30 million won and monthly rents ranging from 1.2 million to 1.5 million won, with many prospective tenants waiting in line, according to local brokers.
An agent from a brokerage near Dongtan Station stated, "If the rate of increase in jeonse prices continues to outpace that of sales prices for several months, tenants may feel pressured to buy a home instead. This could lead to a domino effect, pushing up sales prices in the housing market due to instability in the rental market in the second half of this year."
* This article has been translated by AI.
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