Recently, the rise in house prices in Seoul has increased residential demand in Gyeonggi and Incheon, but both the supply and transaction volume of jeonse in Gyeonggi and Incheon have sharply decreased due to the strong lending regulations outlined in the 6.27 measures. There are even apartment complexes in Gyeonggi and Incheon with no jeonse listings at all.
According to real estate big data company RichGo, as of the 14th, the number of jeonse listings in Gyeonggi was 21,351, a 10.3% decrease compared to a month ago (23,802 listings). In Incheon, the number of jeonse products also decreased by 7.9% to 4,628 compared to the previous month.
As of the 14th, there are zero jeonse listings available for transaction at Incheon Bupyeong Central Forest (704 units). In Gyeonggi, there are also no jeonse listings at apartments such as 'Raemian Geumgwang' in Seongnam (1,098 units), 'Osan Station I-Pyunhan Sesang 1·2 Complex' in Osan (2,368 units), 'Sosaeul Station Chungheung S-Class' in Bucheon (1,104 units), and 'Prugio 1st' in Ansan (1,008 units).
As the population moving from Seoul to Gyeonggi and Incheon increases, the residential demand in Gyeonggi and Incheon is expected to continue growing. According to the Statistics Korea, in the second quarter of this year, Gyeonggi saw a net influx of 10,426 people, the highest in the country. Incheon experienced a net influx of 8,050 people, making it the second-highest in the country for net inflows. In contrast, Seoul recorded a net outflow of 10,051 people to other regions, the highest level of net outflow in the country.
With so many people moving to Gyeonggi or Incheon, concerns have been expressed that the announcement of the 6.27 household debt measures, which impose real estate loan regulations and strengthen actual residence requirements while blocking gap investments, will lead to a 'jeonse crisis' in these areas. This is because supply is nonexistent while demand continues to grow.
The 6.27 household debt measures include provisions that limit housing mortgage loans to a maximum of 600 million won when purchasing dwellings in the metropolitan area and regulated areas, and impose a relocation obligation within six months if a loan is obtained, ensuring that financial loans can only be utilized for actual residence purposes. Additionally, it prohibits jeonse loans conditional on ownership transfer within the metropolitan area and regulated areas, preventing loan funds from being used for housing purchases not intended for actual residence, such as gap investments. As a result, only genuine demanders are likely to utilize mortgage loans, and it seems that jeonse and monthly rent listings will not be supplied, except for some multiple housing suppliers.
The supply of move-in units in the Gyeonggi and Incheon areas is also decreasing. According to Real Estate R114, the scheduled supply of new move-in units in Gyeonggi next year is expected to be 66,013 units, a 13.0% decrease from this year's 75,868 units. Incheon is expected to have 17,102 units scheduled for next year, down 24.3% from this year's 22,602 units.
Experts anticipate that the jeonse shortage will intensify after the 6.27 measures, indicating that overall price increases may occur. They also noted that while the government has announced plans to expand public supply, there will likely be limitations.
Go Jun-seok, a professor at Yonsei University's Sangnam Business School, stated, "As listings for jeonse become scarce in popular areas such as Seongnam and Gwacheon, prices are expected to rise significantly," adding, "While increased public supply may somewhat help alleviate the jeonse shortage, the upward pressure on jeonse prices will likely prevail."
Seo Jin-hyung, a professor at Kwangwoon University's Department of Real Estate Law, said, "In our country, the rental housing market has a significant proportion of jeonse supplied by multiple homeowners, but recent regulations are tightening the screws on these multiple homeowners, inevitably reducing jeonse supply," and added, "Moreover, issues such as jeonse fraud in non-apartment dwellings like villas are funneling demand into the apartment rental market, leading to continuous price increases in the apartment rental space."