After the city of Seoul appointed outside experts to forecast the dwellings market, most projected that jeonse prices will rise in January. Nearly 60% of all respondents expected this month's jeonse prices to keep climbing. Since January, some districts have also seen record-high jeonse contracts. Experts say the rental market is showing signs of a shortage of listings, making it likely that jeonse prices will continue to run high.
According to the city of Seoul's dwellings market monitoring survey on the 7th, 59.3% saw Seoul apartment jeonse prices rising in January. In other words, 6 out of those surveyed 10 expected jeonse prices to go up. A flat outlook was 34.8%, and a decline was 5.9%. Each year, Seoul appoints 460 licensed real estate agents active in the city's 25 districts on one-year terms to analyze the dwellings market monthly and release the dwellings market monitoring survey results.
By district, in 19 of the 25 districts overall, a majority of the monitoring panel expected jeonse prices to rise, with the exception of 6 districts. Districts with many flat outlooks were Jongno, Gwangjin, and Dongjak, and districts where flat and rising outlooks were tied were Gangbuk, Jungnang, and Geumcheon.
In fact, some complexes have signed contracts this month at high jeonse prices. According to the Ministry of Land, Infrastructure and Transport, on the 3rd, a 45.87-square-meter exclusive area unit at Gaepo Xi Residence in Gaepo-dong, Gangnam District, signed a jeonse contract with a 1.05 billion won deposit. The same size unit signed a jeonse contract at 680 million won on Apr. 16, 2023, two years earlier, so the jeonse price rose 54% (370 million won). Seodaemun Prugio Central Park in Hongje-dong, Seodaemun District, also set a new reported jeonse high. A 55.25-square-meter exclusive area unit was contracted on the 3rd for 630 million won. That was up 26% (130 million won) from the jeonse price signed on Sept. 21, 2024 (500 million won).
World Meridian 2 in Mok-dong, Yangcheon District, also signed a new reported jeonse high on the 5th, with an 84.3-square-meter exclusive area unit at 820 million won. That contract price is 6% (50 million won) higher than the recent transaction (Aug. 10, 2024, 770 million won). As of the 6th of this month, there have been 11 reported jeonse-high transactions across Seoul's 25 districts. According to the Seoul Real Estate Information Plaza, the average jeonse transaction amount in Seoul was 576.93 million won in January last year, but rose to 630.33 million won in December last year, up 53.4 million won (9.2%).
Experts expect jeonse prices to keep rising for the time being. With fewer new move-ins and more conversions of jeonse to monthly rent, they said it will not be easy for the upward trend in jeonse prices to break.
Ham Young-jin, head of the Real Estate Research Lab at Woori Bank, said, "Since 2022, permits and groundbreakings for dwellings have continued to decline, and as a result, completions and move-in volumes are also falling," adding, "A shortage in the supply of newly built dwellings is leading to fewer jeonse listings and is also affecting the rise in jeonse prices."
Sim Hyeong-seok, head of the UddebBang Research Institute (professor at IAU in the U.S.), said, "Beyond the decrease in new move-in volume, existing jeonse supply has turned into monthly rentals, reducing jeonse listings, and combined with shunning of townhouses, multiplex units, and officetels due to the impact of jeonse fraud, apartment jeonse prices are rising," forecasting that jeonse prices will keep increasing throughout the year.
Meanwhile, many also expect apartment monthly rents to rise this month. In the dwellings market monitoring survey, 51% of all respondents projected that monthly rents would rise in January. A flat outlook accounted for 44.7%, and a decline 4.3%. By district, 14 districts, including the three Gangnam districts (Gangnam, Seocho, and Songpa), Seongdong, Seongbuk, and Nowon, were projected to rise, and 8 districts, including Mapo and Gwangjin, were projected to be flat. Gangbuk, Gangseo, and Geumcheon districts had equal proportions of respondents expecting flat and rising trends.