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Apartment prices in Seoul, elsewhere continue to soarBy Kim Young-won
Published : Sept. 8, 2020 - 15:16
Despite the government’s claim that the housing market is stabilizing, apartment prices in Seoul increased in August from the previous month and the same was true for other cities across the nation, data showed Tuesday.
The number of listings for “jeonse” rentals, which involve a large lump-sum deposit in lieu of monthly rent, and regular monthly rentals have dramatically decreased in recent weeks. Furthermore, landlords began raising rents before the government implemented rent-control rules that now limit jeonse deposit increases to a maximum of 5 percent as of July 31.
The volume of loans for two-year jeonse rentals has been increasing as well.
According to the Korea Appraisal Board, the average price of an apartment in Seoul stood at 886.21 million won ($745,705) last month, up from 881.83 million won the previous month. Most cities, including Sejong and Incheon, saw property prices increase during the same period. Apartment prices in Sejong surpassed 500 million won on average for the first time as the government’s plan to move its administrative agencies to the city prompted demand in the region.
Apartment complexes that are in high demand in Seoul saw jeonse prices soar, according to a recent report from property platform operator Zigbang, which analyzed 1,596 housing transactions in July and August.
For a 107-square-meter apartment in Gangdong-gu in eastern Seoul, a jeonse deposit jumped from 650 million won in July to 895 million won in August. A jeonse deposit for a 131-square-meter apartment in Jamsil, a posh residential district in southern Seoul, increased by 230 million won in the same period. In other districts, including Geumcheon, Gwanak and Guro, jeonse prices rose too.
The outstanding balance of jeonse loans at five commercial banks, including KB Kookmin Bank and Woori Bank, jumped 2.4 trillion won to 97.1 trillion won as of end-August -- the highest level this year. This figure rose for the eighth consecutive month.
“Because of the supply shortage after the government’s new regulations went into effect, jeonse prices have skyrocketed,” said an official from the financial segment. “That may have led to the increased amount of loans taken out by tenants.”
Meanwhile, two apartments within the Acro River Park complex in Banpo, southern Seoul, each measuring 200.59 square meters, marked the most expensive jeonse deposits in April and May, respectively, at 4 billion won. The deposit jumped 300 million won in less than three years. Built in 2016, the apartment complex saw sale prices for its units exceed 100 million won per square meter in October last year.
By Kim Young-won (email@example.com)
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