In the second quarter of this year (Apr.–Jun.), the jeonse-to-sale price ratio for villas (row houses and multi-household dwellings) in Seoul rose to 60.8%, surpassing 60% again after nine months. In Gangbuk District, it surged 18.8 percentage points in a quarter, nearing 80%. The market says villa jeonse demand, which had shrunk in the wake of the jeonse fraud fallout, has revived, and with a shortage of rental listings and new supply overlapping, jeonse prices are being pushed up.
According to the Seoul city government on the 15th, the second-quarter jeonse-to-sale price ratio for Seoul row houses and multi-household dwellings was tallied at 60.8%. The jeonse ratio is the share of the jeonse deposit relative to a dwelling's sale price. In simple terms, this means the jeonse deposit for a villa with a sale price of 500 million won is about 304 million won.
Seoul's villa jeonse ratio surpassed 60% for the first time in nine months since it recorded 62.8% in the third quarter last year. The ratio rises when jeonse prices climb faster than sale prices, or when sale prices are flat or falling. As the gap between jeonse and sale prices narrows, some jeonse demand could shift to purchases.
By district, Gangbuk District had the highest jeonse ratio at 79.2% among Seoul's 25 districts. It jumped 18.8 percentage points in three months from 60.4% in the first quarter this year. Geumcheon District rose from 68.2% to 72.6%, and Guro District from 54.7% to 70.9%, both surpassing 70%. Nowon District also climbed from 58.8% to 68.7%, and Jungnang District rose from 64.3% to 68.0%.
Nam Hyeok-woo of the Woori Bank Real Estate Research Institute said, "Villa sale prices have been flat or edged up only slightly, but jeonse listings have become sharply scarce," adding, "With jeonse demand outstripping supply, jeonse prices are rising quickly."
Actual transaction filings also showed a string of contracts in the same building and floor area with large differences in deposits.
For the exclusive 38.37 square meters at "Cheongsong Jutaek-na" in Mia-dong, Gangbuk District, Seoul, a jeonse contract was reported on May 29 with a 130 million won deposit. A month earlier, on Apr. 27, the reported deposit for the same floor area was 63 million won. The reported amount rose by 67 million won, or 106%, in a month.
For the exclusive 39.51 square meters at "Daewoo Jutaek" in Doksan-dong, Geumcheon District, a jeonse contract was concluded on May 7 at 160 million won. That is 60 million won, or 60%, higher than the 100 million won reported for the same floor area on Mar. 14.
For the exclusive 64.84 square meters at "Iljin Parkville A" in Gaebong-dong, Guro District, a contract was signed on Apr. 3 with a deposit of 199 million won. That was up 129 million won, or 184%, from the previous reported amount of 70 million won for the same floor area. However, even within the same building and exclusive floor area, deposits can vary depending on factors such as floor, unit number, dwelling condition, and whether it is a new or renewal contract.
Yang Jeong-hyeon, head of Euddeum Complex In-house Realty in Mia-dong, Gangbuk District, said, "There are virtually no villa jeonse listings," adding, "When a listing in decent condition appears, demand rushes in and it is signed right away, pushing up jeonse prices."
Shin Bo-yeon, a professor at the Department of Real Estate AI Convergence at Sejong University, said, "In areas with potential for renewal projects such as the Moa Town initiative, more people are moving in themselves and expecting long-term asset value gains," adding, "If more landlords live in their homes, the number of villas coming onto the lease market may decrease, which can act as a factor pushing up jeonse prices."
Non-apartment starts and completions are also declining. According to the Ministry of Land, Infrastructure and Transport's May dwellings statistics, the number of housing units that actually broke ground from January to May this year was 12,358, down 5.5% from the same period last year. During the same period, completions of non-apartments were 11,448 units, down 3.1%.