With Eunma Apartments in Daechi-dong, Gangnam District, Seoul obtaining approval for its reconstruction project implementation plan, it has emerged as a source of uncertainty for the Daechi-dong lease market. Eunma is a large complex close to the Daechi-dong cram school district, and its jeonse prices in the 600 million to 700 million won range have been lower than nearby complexes, keeping parent tenant demand steady. There is a view that once relocation begins for the 4,424-household Eunma, it could have a significant impact on the Daechi-dong monthly and jeonse rental market.
◇ Eunma, a supplier of jeonse in the 600 million to 700 million won range—will the relocation clock speed up?
According to the maintenance industry on the 4th, Gangnam District approved the project implementation plan for the Eunma Apartments reconstruction maintenance project on the 2nd. Having received project implementation approval, Eunma will proceed with subsequent steps such as establishing and approving the management and disposal plan, relocation, and demolition work. The association is targeting a groundbreaking in 2028.
In the market, there is an observation that if relocation for Eunma becomes a reality, the Daechi-dong monthly and jeonse rental market could be shaken. That is because Eunma's jeonse prices were on the relatively lower end among large complexes in the Gangnam area. Even though it is within walking distance of the Daechi-dong cram school district, jeonse prices were set in the 600 million to 700 million won range, several hundred million won lower than nearby complexes.
According to the actual transaction price disclosure system of the Ministry of Land, Infrastructure and Transport, a 76.79-square-meter exclusive area unit at Eunma was contracted for jeonse at 700 million won on Jun. 29. The same size was sold for 3.45 billion won on Jun. 20. A simple comparison puts the jeonse-to-sale price ratio at around 20%.
Tenant demand for Eunma is not small. Over the past year, there were 974 monthly and jeonse rental contracts at Eunma, including new and renewed leases. That amounts to 22% of the 4,424 households. A maintenance industry official said, "Eunma is close to the Daechi-dong cram school district, and it was a complex where tenants could find jeonse at a relatively low price among large complexes in the Gangnam area," adding, "If the relocation timetable is set, concerns among parent tenants will grow."
◇ Nearby jeonse well over 1 billion won… Eunma tenants have few places to go
Jeonse prices at nearby complexes that could absorb Eunma's tenant demand mostly exceed 1 billion won. According to the real estate platform Asil, Daechi Seonkyung 1 and 2 currently have two jeonse listings and one monthly rental listing. The complex, completed in 1983, has 1,034 households. A 127.75-square-meter jeonse listing is 2 billion won, and a 160.76-square-meter unit has a jeonse listing at 1.7 billion won and a monthly rental listing with a 1 billion won deposit and 3.6 million won monthly rent.
There are also monthly and jeonse rental listings at nearby Daechi Useong 1 and Hanbo Mido Mansion 1 and 2, but the jeonse deposits are higher than at Eunma. Daechi Useong 1 has four jeonse listings and three monthly rental listings, and Hanbo Mido Mansion 1 and 2 have 104 jeonse listings and 70 monthly rental listings. At both complexes, jeonse deposits are set at levels exceeding 1 billion won.
If Eunma jeonse tenants want to stay in Daechi-dong with the same budget, they may have to look for villas or multi-family homes rather than apartments. Choi Young-ju, head of Samsung 25 Licensed Real Estate Agency, said, "Because Eunma's jeonse prices were relatively low, to move within Daechi-dong at the same price, you may have to look at villa listings in Daechi 4-dong near the cram school district."
Ham Young-jin, head of the Real Estate Research Lab at Woori Bank, said, "It is still difficult to predict because the relocation and demolition schedule has not been finalized," but noted, "Relocation at Eunma is a key variable in the Daechi-dong lease market, and if relocation demand increases, it could put upward pressure on nearby monthly and jeonse rental prices."