As the upward trend in Seoul’s apartment jeonse (lump-sum housing lease) prices continues, sales prices are also rising, centered around outer areas with relatively lower price burdens. This is analyzed as being driven by the movement of demand toward mid-to-low-priced regions as jeonse prices rise and jeonse listings decrease.

According to the “Weekly Apartment Price Trends for the Third Week of September” released by the Korea Real Estate Board on the 28th, cumulative jeonse prices for Seoul apartments rose by 8.00%. By autonomous district, Seongbuk-gu saw the highest increase at 13.32%, followed by remarkable upward trends in outer areas such as Nowon-gu (12.78%), Gangbuk-gu (10.34%), and Dobong-gu (10.17%).

Jeonse listings are also decreasing. According to the proptech platform Asil, Seoul apartment jeonse listings, which stood at 23,060 cases on January 1, dropped by 3,491 cases (15.1%) to 19,569 cases as of the 28th. Over the same period, Geumcheon-gu decreased by 61.3%, Guro-gu by 58.3%, and Dobong-gu by 49.7%.

The rise in jeonse prices and the shortage of listings are also impacting sales demand in outer regions. Analysts note that as the burden of jeonse prices grows, demand is emerging to choose home purchases instead of jeonse in relatively lower-priced areas.

Loan regulations are also having an effect. With the mortgage limit for the Seoul metropolitan area capped at 600 million won and loan limits decreasing for homes exceeding 1.5 billion won as prices go higher, analysis suggests that home-buying demand is shifting away from central areas with many high-priced homes toward outer areas with relatively smaller self-capital burdens.

In actual sales prices, a similar trend appeared. According to the Korea Real Estate Board, Seoul apartment sales prices rose by 8.09% this year. Seongbuk-gu rose the most at 14.46%, while Guro-gu (11.53%) and Nowon-gu (11.14%) also exceeded the Seoul average.

On the other hand, the increase in the Gangnam 3 districts was relatively limited. Gangnam-gu rose by only 0.30%, Seocho-gu by 1.70%, and Songpa-gu by 5.33%. While the upward trend in jeonse prices is prominent in mid-to-low-priced regions, the sales market also shows relatively larger increases in outer areas.

Song Seung-hyun, CEO of City and Economy, stated, “As jeonse prices rise and jeonse listings decrease, a growing number of tenants looking to reside through jeonse are judging that it is better to buy apartments in Seoul's outer areas instead. With this demand continuing, apartment sales prices in Seoul’s outer areas are likely to maintain their upward trend.”

Hahm Young-jin, head of the Real Estate Research Lab at Woori Bank, diagnosed, “Looking at the current sales proportion by age group, people in their 30s account for a large share. Amid the continuous rise in jeonse prices and shortage of listings, demand from people in their 30s trying to purchase apartments in Seoul’s outer areas seems to be appearing. Since subscription (apartment allocation) prices are also at a high level, demand choosing to buy existing housing rather than waiting for subscriptions is increasing as well.”

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