"Last Saturday, two newlywed couples from Seoul came to look at homes to buy. They said as long as commuting is possible, they're casting the widest net they can."
An official at a real estate brokerage in Bisan-dong, Dongan-gu, Anyang, Gyeonggi Province, visited earlier this month, described the atmosphere: "This time of year, newlyweds usually come looking for jeonse (lump-sum deposit lease) properties, but lately inquiries about purchases have increased considerably." The official added, "Many people say there are simply no jeonse options left in Seoul, and buying there is too expensive, so they ended up coming to Anyang. Most bargain listings have already been snapped up, but demand remains strong, so prices keep climbing."
As available jeonse listings in Seoul continue to hit record lows day after day, deepening the lease crisis, home prices in Gyeonggi areas adjacent to Seoul — including Anyang, Gwangmyeong, Yongin and Hanam — are surging. Renters forced into the buying market by the jeonse shortage are turning to Gyeonggi Province after being shut out of Seoul by tight lending regulations and sky-high prices, accelerating the "exit from Seoul" trend.
According to KB Real Estate data released on Saturday, Seoul's jeonse supply-demand index reached 172.41 as of last month, the highest since August 2021. A reading above 150 generally signals a jeonse shortage, while readings above 180 are considered a full-blown lease crisis. The Gangbuk area recorded 182.23 last month.
Jeonse listings in Seoul's Gangbuk districts are indeed drying up rapidly. Data from Asil showed that Nowon-gu's jeonse listings plunged 68.3% from 686 at the start of the year to 218. Dobong-gu and Gangbuk-gu also saw listings drop by more than 50% over the same period. As the lease crunch pushes rental demand into the purchase market, home prices in Seoul's southwestern and northeastern districts have jumped sharply. This in turn is creating a "balloon effect," with buyers flocking to nearby Gyeonggi areas and driving up transaction prices.
According to the Korea Real Estate Board, Yongin's Suji-gu posted the largest apartment price gain nationwide in the first quarter, with prices rising 6.44% through the end of last month. It was followed by Anyang's Dongan-gu at 5.19%, Guri at 4.03%, Seongnam's Bundang-gu at 3.98%, Hanam at 3.86% and Gwangmyeong at 3.84%. All six of the top-gaining areas are in Gyeonggi Province adjacent to Seoul, clearly showing the spread of the housing price rally across the greater Seoul metropolitan area.
The key factor driving prices higher in these areas is an influx of buyers who currently live in Seoul. According to the Korea Real Estate Board, of the 20,317 apartment transactions in Gyeonggi Province in February, 3,077 — or 15.1% — were made by Seoul residents, up 3.6 percentage points from 11.5% in the same month a year earlier. In areas particularly close to Seoul such as Guri, Hanam and Namyangju, Seoul residents accounted for roughly 35% of purchases. Ham Young-jin, head of the Real Estate Research Lab at Woori Bank, said, "Seoul-focused lending regulations and jeonse market instability have combined to push demand toward Seoul's outskirts and adjacent areas, where many properties are priced below 1.5 billion won and are relatively free from loan restrictions."
Record-high transactions are emerging one after another in these areas. The 84-square-meter unit at Pyeongchon Centum First in Hogye-dong, Dongan-gu, Anyang, was contracted at 1.56 billion won on March 29, setting a new high. The price rose nearly 100 million won in just one month from the February transaction price of 1.465 billion won. This marks the first time an apartment of that size in Anyang has exceeded 1.5 billion won. An 84-square-meter unit at Lotte Castle Gold Town in Seongbok-dong, Suji-gu, Yongin, also set a new record at 1.74 billion won on March 11. The complex has been breaking its own price record every month since December last year. A 59-square-meter unit at Hillstate Guri Station in Guri was contracted at 1.0675 billion won in March, up roughly 50 million won from the end of last year. A 96-square-meter unit at Misa Gangbyeon Central Xi in Hanam also renewed its record at 1.63 billion won, up approximately 100 million won over a similar period.
As bargain listings are rapidly absorbed in these areas, bidding wars among buyers are becoming increasingly common. A brokerage owner in Bisan-dong said, "A 59-square-meter unit at Pyeongchon Xi Ipark was in negotiations at 970 million won, above the most recent transaction price of 950 million won. But after more than 10 groups visited over the weekend, buying interest intensified and it sold for 10 million won above the asking price."
The jeonse shortage, now spreading from Seoul across the entire metropolitan area, is expected to fuel buying momentum further. According to Asil, Seoul's jeonse listings stand at 15,464 — setting new all-time lows day after day since records began. Gyeonggi Province has also seen listings fall to 12,830, down roughly 28% from the start of the year. Nam Hyuk-woo, a researcher at Woori Bank's Real Estate Research Institute, said, "Satellite cities on the outskirts of Seoul in Gyeonggi Province face a severe shortage of lease and monthly rent listings, and the shift from rental to purchase demand is unmistakable. With rental housing supply remaining limited for the time being, the jeonse shortage and the shift toward monthly rent are likely to intensify."
