Jeonse prices for apartments in Seoul's Gangdong District and Gyeonggi Province's Hanam rose more than 10% last year. As average jeonse prices for apartments in the three Gangnam districts (Gangnam, Seocho, and Songpa) approached 1 billion won, demand for jeonse spilled over into adjacent areas. Jeonse prices for new apartments in these areas are surging to levels comparable to those in the Gangnam area.
According to KB Real Estate and the real estate platform Asil on Jan. 2, the jeonse price index for apartments in Gangdong District rose 10.6% from January to Dec. 22 last year. It was the biggest increase among Seoul's 25 districts. It was also a record high in three years. Gangdong's jeonse price growth rates were -0.4% in 2023 and 1.1% in 2024.
Songpa followed at 8.2%, then Yongsan (6%), Gwangjin (5.7%), Jung (4.9%), Yangcheon (4.8%), Seocho (4.7%), and Nowon (4%). Geumcheon had the lowest jeonse price growth at 0.5%. The broad-based rise in apartment jeonse prices across Seoul is largely due to the clampdown on gap investing (purchases with tenants in place). Through the Oct. 15 real estate measures, the government designated all of Seoul and 12 areas in Gyeonggi as land transaction permit zones and imposed owner-occupancy requirements. As a result, new jeonse supply was choked off and prices rose.
The sharp rise in Gangdong's apartment jeonse prices is not unrelated to the boom in the three Gangnam districts. According to the Seoul Real Estate Information Plaza, the average jeonse transaction amount for apartments in the three Gangnam districts climbed from 815.36 million won in January last year to 951.72 million won in November. In Gangnam and Seocho, the average jeonse transaction amount exceeded 1 billion won, and in Songpa, where the average had been in the low 600 million won range, it jumped into the 800 million won range. Gangdong's average jeonse transaction amount in November last year was 626 million won. It is analyzed that those who could no longer afford the higher deposits moved to nearby Gangdong, increasing price pressure.
Large new apartment complexes are leading the rise in jeonse prices. In Gangdong's Godeok-dong, a 84-square-meter unit at "Godeok Raemian Hillstate," which had transacted in the 700 million won range early last year, signed a jeonse contract at 1 billion won on Dec. 22, setting a new high. The highest asking price for the same size unit is 1.2 billion won, similar to major complexes in Songpa. At the three leading complexes in Jamsil known as "Elite (Els, Lotte Richez, and Trizium)," jeonse asking prices (84 square meters) range from 1.1 billion to 1.5 billion won. At the 12,000-unit "Olympic Park Foreon" in Dunchon-dong, an 84-square-meter unit even transacted at 1.3 billion won in September last year.
In Gyeonggi Province, Hanam posted the highest jeonse price growth for apartments at 11.4%. The new towns of Gamil, Wirye, and Misa in Hanam border the Songpa–Gangdong living area and are known for excellent transportation access. Elsewhere, Gwacheon (9.2%), Guri (8.1%), and Seongnam (5.6%) also saw large increases in jeonse prices.
There is growing expectation that this trend will continue this year. Park Hap-su, an adjunct professor at Konkuk University's Graduate School of Real Estate, said, "Jeonse demand from the Gangnam area is shifting to Gangdong and Hanam, which have strong transportation, residential, and educational environments, pushing up jeonse prices," adding, "This year, a shortage of supply is likely to deepen the lack of jeonse inventory, potentially spreading a balloon effect to the outskirts of Gyeonggi Province."