Jeonse Deposit Reaches 475.15 Million Won While Presale Prices Are in the 500 Million-Won Range... Non-Homeowners in Turmoil

[Financial News] Average jeonse deposits for apartments in the Seoul metropolitan area have surpassed 470 million won. As tighter lending rules coincide with pressure to raise the benchmark interest rate, tenants’ housing costs are reaching their limits, prompting more end-user buyers to turn to the new-home presale market.
According to Real Estate R114 on the 4th, the average jeonse deposit for apartments in the Seoul metropolitan area stood at approximately 475.15 million won as of August. This figure is well above the 400 million won deposit limit for the Beotimmok jeonse deposit loan for newlyweds. As more non-homeowner tenants became unable to use policy-backed loans, the number of newlywed Beotimmok loans issued last year plunged 57.2% from the previous year.
The Bank of Korea (BOK) also raised the benchmark interest rate to an annual 3.00%, further increasing the burden of interest on market-rate jeonse loans. As it became more difficult to raise lump-sum deposits or obtain loans, the rental market’s shift from jeonse to monthly rent accelerated. However, monthly rent, which creates a fixed expense every month, is also a significant burden for end-user buyers.
Against this backdrop, more non-homeowners are carefully comparing housing costs and turning away from long-term rentals toward newly built apartments in the Seoul metropolitan area with relatively competitive prices. In fact, complexes launched earlier in areas such as Anyang with reasonable presale prices achieved strong sales, recording competition rates of dozens to one.
New complexes offering reasonable presale prices are currently being supplied in major areas of the Seoul metropolitan region, attracting the attention of end-user buyers.
City Ociel Complex 9 Ocean Parkview, being sold by a Hyundai Engineering and Construction-led consortium in Yonghyeon-Hakik Block 1 of Incheon Metropolitan City, has an average presale price in the low 700 million-won range for an exclusive area of 84 square meters. It is regarded as price-competitive among newly built apartments in the Seoul metropolitan area. Buk-Osan Xi de Foret, being sold by GS Engineering & Construction in Naesammi-dong, Osan, has a presale price in the 600 million-won range for an exclusive area of 84 square meters, a reasonable level compared with prices of nearby older apartments. The Sharp Yeoju Station The First, supplied by POSCO E&C in Hongmun-dong, Yeoju City, is also drawing attention, with a presale price of approximately 500 million won for an exclusive area of 84 square meters.
[email protected] Jeon Min-kyung Reporter