A 1 billion won jeonse deposit moves out of Mapo and into Gireum-dong

A jeonse contract replaces monthly rent with one large lump-sum deposit ^[1], so the jeonse-to-sale ratio is the share of a flat's price the tenant has put up. The Korea Real Estate Board puts that ratio at 55.8% averaged across the northeastern region of Seongbuk, Dongdaemun and Nowon, against 45.8% in the southeastern region that holds the three Gangnam-area districts ^[11]. A 1 billion won deposit at 55.8% sits against a flat priced near 1.79 billion won ^[17]. Sale prices in the northeast would have to fall 44.2% before the deposit equalled the full value of the unit behind it, and 54.2% in the southeast, a gap of 10 points ^[18].

Two of the report's comparisons do not hold as printed. It describes the northeast's 55.8% as below a Seoul average of 52.3% ^[11]. It also calls this year's 7.79% cumulative rise about 4.7 times last year's 1.16% over the same weeks ^[2], when dividing one by the other gives 6.7 ^[16].

In Gangbuk the ask has run ahead of the last contract. The asking deposit on a 12th-floor, 84-square-meter unit at Hanwha Forena Mia in Mia-dong is 1.2 billion won, and the most recent trade in that size went at 950 million won on June 26 ^[9]. The ask is 26% above the print ^[19].

Hong Ji-sun, the nominee for minister of land, infrastructure and transport, told the National Assembly in written answers that the drop in listings and the rise in prices come primarily from a steep decline in newly completed homes in Seoul and the surrounding metropolitan area, an effect of weak construction starts that have persisted since 2022 ^[14]. "The most important policy for stabilizing the rental market is sufficient housing supply," Hong said ^[15].

In my view the deposits in the northeast are being set off sale prices that have themselves moved on a shortage. That makes Gangbuk's 1.2 billion won the figure to distrust first: it is a landlord's estimate of the next contract. The counter-case is that sale prices lead and deposits follow, so a stall in sale prices pulls the deposits back and the 55.8% ratio turns out to have been a peak reading. Evidence for that would be jeonse indices in the northeast decelerating while sale prices keep climbing. The report covers contract prices and district indices. It does not include any figure for jeonse loan balances or how tenants fund the deposits, so the household borrowing side cannot be read from it ^[22].