The jeonse rate in the three districts of Gangnam (Gangnam, Seocho, and Songpa) fell to its lowest level on record last month. This is because the increase in sale prices outpaced that of jeonse prices. The jeonse rate refers to the ratio of jeonse prices to sale prices.
According to KB Real Estate on the 15th, the average jeonse rate in the three districts of Gangnam was recorded at 42.7% in May. This is a decline of 0.4 percentage points from the previous month's 43.1%.
The jeonse rate for apartments in Gangnam recorded 40.4%. This is a drop of 0.3 percentage points compared to the previous month (40.7%). Seocho also saw a decrease in jeonse rates, falling from 45.4% to 44.8%, a drop of 0.6 percentage points. Songpa recorded a jeonse rate of 42.8%, down 0.3 percentage points from the previous month. All these districts have recorded the lowest jeonse rates since relevant statistics began to be compiled.
Although it is not one of the three districts of Gangnam, Seongdong-gu, which has recently seen a significant rise in housing prices, also recorded a historic low jeonse rate of 50.1%.
The jeonse rates for apartments across Seoul are on a downward trend. The overall jeonse rate for apartments in Seoul was 53.4% last month, down 0.1 percentage points from the previous month.
The drop in Seoul's jeonse rates is due to the sharp rise in housing prices centered around the three districts of Gangnam after the temporary lifting of the land transaction permission area in February. Typically, when housing prices rise significantly, jeonse prices are formed relatively lower, leading to a decrease in the jeonse rate.
According to the Korea Real Estate Board's 'National Housing Price Trends Survey,' apartment sale prices in Songpa-gu, Seoul, rose by 4.28% in the first quarter of this year. This is more than four times the average increase in Seoul (1.06%). Gangnam and Seocho also saw an increase of 3.52%, recording the second-highest rate of increase in the country.