Apartment complexes in Seoul. (Yonhap)
The average jeonse-to-sales price ratio for apartments in Seoul and surrounding areas continued a downward trend last month, according to real estate data tracker KB Kookmin Bank Liiv On on Tuesday.
”Jeonse” is a real estate term unique to South Korea that refers to a two-year property lease. The average apartment lease was equivalent to 54.7 percent of the average sales price in Seoul, while the figures for Incheon and Gyeonggi Province, respectively, came in at 73.1 percent and 65.1 percent.
The jeonse-to-sales price ratio has been declining in Seoul since it dropped below 60 percent in November 2018. Incheon saw the ratio fall from 75 percent in January to 73.1 percent in April, while Gyeonggi Province saw the figure drop for the fifth consecutive month since November. In March, the average jeonse price in the province fell 68.8 percent, crossing the 70 percent mark for the first time in five years.
Some market watchers said the fall in the jeonse-to-sales price ratio reflects a sharp increase in sales prices in recent months, widening the gap with jeonse prices.
“The government’s new regulations on the real estate market, including high property taxes and strict mortgage rules, is expected to cool down the property market and consequently the gap between the rent and sales prices could narrow in the coming months,” an industry watcher said.
By Kim Young-won (email@example.com