[비즈한국] Person A currently lives in a jeonse (lump-sum housing lease) unit at Tower Palace in Dogok-dong, Gangnam-gu, Seoul. With their jeonse contract set to expire this June, they decided to move. As their office relocated, adding over 30 minutes to their daily commute, they decided to move to the Yongsan area. Although they notified the landlord of this fact back in early February and even signed a new jeonse contract for their new home to match the expiration date, they are deeply worried. It has been nearly three months since they listed the property, but only one team has come to view the house with the intention of living there under a jeonse contract.
Person A cautiously suggested to the landlord that the jeonse price might need to be lowered, and the price was adjusted, but there are still no prospective tenants coming to view the unit. Person A lamented, "I need to get my jeonse deposit back to pay for the new home, and I can't sleep at night because I'm worried that if the house doesn't lease before the June expiration, the new contract might be canceled."
Person B, an office worker in their 30s who also resides at Tower Palace, is in a similar situation. Person B listed their home with real estate agencies two years ago and asked them to "please sell or lease it as soon as possible—anything is fine." From the end of last year through early this year, there was about one team a month coming to view the property. However, after recent loan regulations were implemented, potential viewers have completely stopped coming. Person B said, "Not a single team has come to view the house for jeonse in three months," adding, "I knew Tower Palace wasn't as popular as other places in Dogok-dong due to school districts, but I had no idea it was this bad."
While the 'jeonse shortage' is worsening across Seoul, the Gangnam area is showing a completely opposite trend. In fact, checking listings on Naver Real Estate, there are over 20 jeonse listings for both Tower Palace Phase 1 and 2. Nearby Hanbo Mido Mansion Apartment has nearly 50 listings, and Dogok Rexle has over 40 listings piled up. Banpo Xi, which has over 3,400 households, also has over 200 jeonse listings on Naver Real Estate.
On the other hand, non-Gangnam areas are experiencing a supply crunch. SK Bukhansan City, with over 3,800 households, has only two jeonse listings, and Hanshin Hanjin Apartment, with over 4,500 households, has only five. In the case of Junggye Mujigae in Junggye-dong, Nowon-gu, despite being a large complex of over 2,400 households, there are currently no jeonse listings, and only two monthly rental listings are posted.
This is also reflected in the statistics. The jeonse market continues a moderate upward trend. According to the Seoul Metropolitan Government, the actual transaction price for jeonse in Seoul apartments in February rose by 0.22% compared to the previous month. The proportion of renewal contracts within jeonse transactions also exceeded 50% in both February and March, showing a deepening jeonse crisis due to strengthened requirements for actual residency. However, the southeastern and eastern districts, which include Gangnam, showed a 'different trend,' with declines of 0.65% and 0.37%, respectively.
With only house prices in Gangnam, Seoul, falling, experts suggest that the 'jeonse market' in the Gangnam area is also becoming bifurcated.
Person C, who listed their Seocho apartment for jeonse at around 1.5 billion won, explained, "I thought there would be people looking because of their children's education, but no one has come to view it for over five months. Even though I didn't set the jeonse price high, seeing such low interest, I asked a real estate agent. They told me, 'There are more people looking to buy, at least. Those who were living under jeonse contracts are just extending their stays where they currently live,' and advised me not to expect too much for large-sized jeonse units."
As the government pushes for strict regulations on jeonse loans, which had acted as a support for 'high-priced apartment values,' some analyze that "it is not easy to enter the Gangnam area even for jeonse unless you are among the very few who can mobilize 2 billion won in cash."
A representative of a real estate brokerage in Gangnam expressed concern, saying, "Among those who can mobilize 2 billion won, most of those who were living under jeonse contracts have bought apartments in slightly more affordable locations. If jeonse prices aren't adjusted quickly, a series of incidents where Gangnam landlords are unable to return deposits could occur."