As apartment prices in Seoul continue to rise, the upward trend that was once centered in Gangnam is now spreading to northern and non-Gangnam areas. In Gyeonggi Province, the price increase that began in Dongtan is now extending to major southern regions such as Yongin and Suwon. In the jeonse market, the rising rents have led to a notable increase in the proportion of existing tenants renewing their leases, surpassing 50% for the first time, indicating a trend of tenants 'staying put.'
Seongbuk and Guro Lead the Charge as Seoul's Housing Prices Rise Northward
According to the Korea Real Estate Agency's report on nationwide apartment price trends for the first week of July (as of July 6), the average apartment sale price across the country increased by 0.11% compared to the previous week.
In Seoul, the increase in apartment sale prices rose to 0.30%, up from 0.27% the previous week. The agency noted, "While some areas are still in a wait-and-see mode, transactions are continuing in complexes with development potential and in well-located, large-scale developments near subway stations."
This survey highlighted a significant rise in the northern districts of Seoul. The average increase in the 14 northern districts was 0.33%, surpassing the 0.28% increase in the 11 southern districts. Notable increases were recorded in Seongbuk-gu (0.51%), Guro-gu (0.50%), Jungnang-gu (0.39%), Gwangjin-gu (0.38%), Gangbuk-gu (0.37%), and Dongdaemun-gu (0.36%).
In the southern districts, Songpa-gu and Gangdong-gu both saw the largest increases at 0.34%, followed by Yeongdeungpo-gu (0.32%) and Gwanak-gu (0.31%).
The agency explained that Seongbuk-gu's rise is driven by large complexes in Hawolgok and Jongam-dong, while Jungnang-gu's increase is centered around the Shinnae and Myeonmok-dong subway areas, and Gwangjin-gu's growth is attributed to small to medium-sized complexes in Guui and Jayang-dong.
Despite Regulations, Southern Gyeonggi Province Remains Strong as Price Increases Spread to Yeongtong
In Gyeonggi Province, the strength in the southern region continues. Despite the government's designation of Dongtan in Hwaseong, Giheung in Yongin, and Guri as regulated areas and land transaction permission zones, Dongtan saw a 1.29% increase this week, only slightly down from the previous week's 1.46%.
Notably, Yeongtong-gu in Suwon surged by 1.19%, marking one of the highest increases in the region. Analysts suggest that the buying momentum that was concentrated in Dongtan is now shifting to adjacent areas, creating a balloon effect.
As Jeonse Prices Rise, 'Staying Put' Becomes Common; Renewal Rate Exceeds 50%
The jeonse market is also experiencing instability. The jeonse prices for apartments in Seoul increased from 0.30% last week to 0.31% this week, surpassing the sale price increase rate of 0.30%.
According to the Ministry of Land, Infrastructure and Transport's real transaction disclosure system, there were 57,354 jeonse contracts for Seoul apartments in the first half of this year. Among these, renewal contracts accounted for 28,770, or 50.2%, marking the first time the proportion has exceeded half.
In contrast, new contracts totaled 26,764 (46.7%), while contracts without specified categories accounted for 1,820 (3.2%). This represents a 9.8 percentage point increase from the 40.4% renewal rate in the first half of last year.
While the levels for multi-family and multi-unit dwellings remained similar to last year, the proportion of renewals for apartments has significantly increased. This trend suggests that rising jeonse prices are leading tenants to prefer staying in their current homes rather than seeking new ones.
New Tenants Face Increased Burden as Jeonse Deposit Gap Reaches 80 Million Won
The burden on new tenants is also growing. According to a report from Zigbang on July 6, the gap in jeonse deposits between new contracts and renewals is rapidly widening, even for the same apartment and size.
In particular, Seoul has seen the largest disparity in the metropolitan area. For an 84 square meter unit, the difference in jeonse deposits between new and renewed contracts has reached up to 80 million won. For a 59 square meter unit, the gap increased from 35 million won in January to 77.5 million won in June, more than doubling. During the same period, the deposit for new contracts rose from 500 million won to 547.5 million won, while the renewal deposit only increased from 465 million won to 470 million won.
Zigbang analyzed that new contracts reflect current market prices immediately, while renewals often maintain existing contract conditions, leading to the widening deposit gap. It further explained that the rising jeonse prices and lack of available listings are increasing the burden on new contracts, which in turn is driving existing tenants to prefer renewing their leases, considering moving costs and other factors.
* This article has been translated by AI.
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