Jeonse price for Seoul apartments falls for first time in over 3 years

Apartment complexes in Songpa District, southern Seoul, as seen from Seoul Sky on Monday. [YONHAP]

The average jeonse price for an apartment in Seoul has fallen for the first time in three years and three months.

This is interpreted to have come as part of the aftermath of a sharp drop in demand for loans for jeonse — lump-sum long-term deposit leases — as interest rates increase and some landlords extend contracts due to the influence of the government’s win-win landlord policy.

According to KB Kookmin Bank’s Monthly Housing Price Trend report on Tuesday, the average jeonse price for an apartment in Seoul this month was 677.88 million won ($517,500), down from last month’s 677.92 million won. Although the extent of the decline is small, it is the first time in three years and three months that the average jeonse price of apartments in Seoul has fallen.

The average jeonse price for apartments in Gyeonggi was 391.61 million won this month, down 450,000 won from the previous month. This is also the first decline in three years for apartments in Gyeonggi.

According to an analysis of transaction prices of real estate by Real Estate R114, a real estate big data company, released by the Ministry of Land, Infrastructure and Transport, the average price of new jeonse apartments in Seoul in the first half of this year fell by 14.18 million won on average compared to the second half of last year. On the other hand, monthly rent increased by 7.19 million won on average compared to the second half of last year.

Jeonse properties are also piling up. According to data compiled by Asil, a real estate transaction app, the number of apartments for sale in Seoul was 31,591 as of Tuesday, a 12.8 percent increase from a month ago. Gyeonggi also saw a 15.8 percent increase in apartments for sale in one month.

BY LIM JEONG-WON [lim.jeongwon@joongang.co.kr]