A "balloon effect" is emerging in cities adjacent to Seoul — including Anyang, Yongin, Gwangmyeong, Guri and Hanam — as apartment transactions and home prices surge in those areas. The trend follows a sharp drop in jeonse (lump-sum deposit lease) listings in Seoul, driven by brisk trading of apartments priced at 1.5 billion won ($1.1 million) or below ahead of heavier capital gains taxes on multi-home owners.
All six areas that posted the steepest apartment price gains in the first quarter were in Gyeonggi Province, according to the Korea Real Estate Board. Yongin's Suji District led with a 6.44% increase, followed by Anyang's Dongan District (5.19%), Guri (4.03%), Seongnam's Bundang District (3.98%), Hanam (3.86%) and Gwangmyeong (3.84%). In Seoul, Gwanak District recorded the largest gain at 3.58%.
Analysts say the price surge in these Gyeonggi areas partly reflects the large supply of homes priced below the 1.5 billion won threshold, where lending restrictions are relatively lighter. But the deepening jeonse shortage also played a significant role. Jeonse listings for Seoul apartments stood at 15,464 as of the 5th, down 33% from the start of the year. The jeonse supply-demand index for northern Seoul reached 182.23 in March, the highest since August 2021. Gyeonggi Province also saw jeonse listings fall roughly 28% from the beginning of the year.
With jeonse options dwindling, Seoul residents are actively purchasing homes in nearby Gyeonggi areas where prices remain relatively lower. Of the 20,317 apartment transactions in Gyeonggi Province in February, 3,077 — or 15% — were made by Seoul-based buyers, Korea Real Estate Board data showed. The share of Seoul-based buyers was particularly high in Guri (35.1%), Hanam (34.5%), Namyangju (28.1%) and Gwangmyeong (24.9%).
"If instability in the rental market persists due to shrinking jeonse supply, home prices on Seoul's outskirts and in nearby areas will continue to stay strong," said Ham Young-jin, head of the real estate research lab at Woori Bank.
