In some newly built large apartment complexes in Seoul, a flood of jeonse listings is appearing at prices far below surrounding market levels. As Seoul apartment jeonse prices continue their steep climb, this is seen as a chance to enjoy good living conditions at a low rent for four years.
According to the brokerage industry on the 28th, in Imun-dong, Dongdaemun District, the Imun I-Park Xi has jeonse listings for an exclusive 59 square meters starting at a minimum of 520 million won. This apartment is a large complex with a total of 4,169 households and is slated for move-in in Nov. This apartment's jeonse price for an exclusive 84 square meters is also in the 600 million won range.
This is more than 100 million won cheaper compared with nearby newly built large complexes. In the case of Raemian La Grande (3,069 households), which saw move-ins in Jan., the jeonse price for an exclusive 59 square meters is in the mid-600 million won to 700 million won range. Analysts say jeonse prices found their footing after the initial move-in period ended.
An official at a certified real estate agency in Imun-dong said, "Because Imun I-Park Xi is an exceptionally large complex, jeonse listings are pouring out temporarily. Its location is also good, being within the station area of Line 1's Hankuk University of Foreign Studies Station," adding, "There are many inquiries because jeonse listings at nearby apartments are locked up."
The impact of the move-in season is also being observed across the Gangnam area. RAEMIAN One Perla (1,097 households) in Bangbae-dong, Seocho District, is also slated for move-in in Nov., and relatively inexpensive jeonse listings are being introduced through inquiries.
For an exclusive 59 square meters at RAEMIAN One Perla, listings are officially on the market in the 1.0 billion–1.1 billion won range. However, ahead of next month's pre-inspection, some landlords are reportedly seeking tenants in the 900 million won range on the condition of a quick jeonse contract before viewing the home. There are no nearby newly built apartments that have completed move-ins for comparison, but the jeonse price for an exclusive 59 square meters at Bangbae Seoripul IPARK Xi, completed in 2010, is around 900 million won.
As jeonse prices continue to rise, the move-in season can be a good option for jeonse seekers. Considering jeonse renewal contracts, they can live in a newly built large complex for a total of four years. According to Real Estate R114, the total number of Seoul apartment households moving in by the end of this year is tallied at 15,484 (including public rentals).
Analysts say the move-in season, which floods the market with jeonse listings, not only sets lower price levels but also reflects the impact of tightened lending regulations. Through the June 27 measures, the government banned jeonse loans conditional on transfer of ownership and reduced the jeonse loan guarantee ratio for dwellings in the greater Seoul area from 90% to 80%. The conversion of jeonse to monthly rent is also accelerating, but as loan limits for jeonse seekers shrink, both the supply and demand for jeonse appear to be declining.
Yoon Ji-hae, a senior researcher at Real Estate R114, said, "In the move-in season, the blockage of conditional jeonse loans will particularly affect landlords," adding, "In the early stages of the move-in season, when competing offerings increase, loan factors inevitably play a bigger role."
Meanwhile, according to the Korea Real Estate Board (REB), in the third week of this month (as of 4th), the weekly jeonse price index for apartments rose 0.07%, marking 33 consecutive weeks of increases since the third week of Jan. (flat).