Dongtan jeonse hits record W750m as land-transaction controls fuel rent surge

Jeonse prices in Dongtan and Giheung — areas newly designated as land-transaction permit zones last month — are accelerating sharply. As a Seoul-driven jeonse crunch spreads into Gyeonggi Province, the owner-occupancy requirement that comes with permit-zone designation is tightening supply and pushing prices higher. In both areas, lease renewals have seen deposits climb by hundreds of millions of won in just two years, and new record-high jeonse contracts are being signed in quick succession.

According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system, an 84-square-meter unit at Dongtan Yeok Sibeom Unam First Ville in Cheongye-dong, Dongtan district, Hwaseong, signed a jeonse contract Wednesday at a deposit of 750 million won ($538,000) — a new record high for the complex. The contract was a renewal without invoking the tenant's right to request renewal; the previous deposit had been 500 million won, meaning it rose by 250 million won in just two years.

Record highs were set across Dongtan. At Dongtan The Sharp Lake Edu Town in Sancheok-dong, Dongtan district, an 84-square-meter unit signed a jeonse contract on Aug. 6 at 630 million won, the highest ever recorded for the complex. At Dongtan Yeok Foreners in Yeongcheon-dong, Dongtan district, an 84-square-meter unit on the 24th floor took in a new tenant Tuesday at 520 million won — up from 400 million won for a new jeonse contract on the same floor type and size just two months earlier, in June.

Giheung, designated alongside Dongtan as a land-transaction permit zone, is seeing the same trend. An 74-square-meter jeonse unit at E Pyeonhansesang Guseong Station Platform City in Mabook-dong, Giheung district, Yongin, crossed the 700 million won threshold for the first time on Aug. 8, signing a lease at 720 million won. At Sindongbaek Lotte Castle Eco 2 Complex in Jung-dong, Giheung district, a 113-square-meter unit set a new record Friday at 600 million won — up from 530 million won for a high-floor unit of the same size traded in April, a rise of 70 million won in roughly four months.

Analysts attribute the surge to a shortage of jeonse listings stemming from Seoul's housing supply crunch, which is pushing demand into well-connected Gyeonggi communities. The government's decision to add Dongtan, Giheung, Guri and other Gyeonggi areas showing a balloon effect to the land-transaction permit zone list from July 5 has also imposed owner-occupancy requirements that are reducing jeonse supply and intensifying upward price pressure.

"The owner-occupancy requirement in land-transaction permit zones, combined with policies that increase the tax burden on non-resident single-homeowners, has cut jeonse supply," said Seo Jin-hyeong, a professor in the real estate law department at Kwangwoon University. "Seoul jeonse prices have risen so much that demand is being pushed out to the outskirts."

The data reflect the trend. According to the Korea Real Estate Board's weekly apartment price survey, Dongtan district in Hwaseong posted the highest jeonse price growth rate among all municipalities in the greater Seoul area this week, at 0.51 percent. Giheung district in Yongin followed closely at 0.48 percent.

Average prices are also climbing. The average jeonse price for apartments in Giheung district, Yongin rose steadily from about 391.57 million won in February to about 416.69 million won in July. Dongtan district saw an even steeper climb: the average jeonse price in July reached about 474.84 million won, up nearly 40 million won from about 436.09 million won in February.

Seo said the lease renewal right under the Housing Lease Protection Act, along with one-household, one-home and owner-occupancy policies, has made it difficult for landlords to enter the market. "Unless policies that pressure rental business operators are reformed, listings will remain scarce and the jeonse crunch will continue," he said.