As real estate regulations such as the 6·27 measures and the 10·15 measures continue, apartment transactions are decreasing, and attention is shifting to non-apartments such as officetels, where regulations are relatively lighter. However, while officetels set new reported highs in various places and saw an increase in transaction volume, villas remained in a slump, showing a contrasting mood.
According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system on the 6th, the number of officetel sale transactions in Seoul from the 5th of last month to the 4th of this month was 940. That was up 11.8% from a month earlier (Sept. 5–Oct. 4), when the volume was 841.
Some individual complexes also saw new reported highs. In Yangcheon District, a 102㎡ exclusive unit at J World Ville transacted last month for 1.3 billion won, up 130 million won from the previous high (1.17 billion won) recorded in June. In Gangseo District, a 42㎡ exclusive unit at Hillstate Eco Magok Station changed hands for 450 million won after the Oct. 15 measures were announced, surpassing the previous high (433 million won).
By contrast, row houses and multi-unit homes saw transaction volume plunge 51.9% over the same period, from 3,485 to 1,849.
The government's back-to-back announcements of real estate market regulations appear to have affected the non-apartment market as well. On June 27, the government announced a household debt management plan that capped the mortgage loan limit at 600 million won, followed by a measure to cut the loan-to-value ratio (LTV) in regulated areas to 40%.
In addition, with the announcement of the 10·15 measures, all of Seoul and parts of southern Gyeonggi were designated as land transaction permit zones. However, officetels are classified as non-dwellings and thus escape most regulatory targets. Officetels are subject to an LTV of 70% and are not recognized as dwellings upon acquisition. The two-year owner-occupation requirement that applies to apartments within land transaction permit zones also does not apply.
Even if a villa is located within the land transaction permit system, there is no owner-occupation requirement and the LTV also remains around 70%. However, row houses and multi-unit homes that include one or more apartment buildings within the same regulated complex see the LTV reduced to 40%. In addition, they are recognized as one dwelling upon acquisition, making the buyer a multi-homeowner upon any additional purchase.
Real estate experts said villas remain sluggish as avoidance persists due to issues such as jeonse fraud.
Kim Eun-seon, head of the Data Lab at Zigbang, said, "Villas such as row houses and multi-unit homes are favored in areas with positive development factors, but in terms of management and other aspects, alternative housing demand is weaker than for officetels," adding, "Rental demand also prefers officetels, so for sales aimed at profit, officetels appear to be considered more."
Seo Jin-hyung, a professor in the Department of Real Estate and Legal Studies at Kwangwoon University, said, "Officetels are superior in daily convenience such as parking, so the balloon effect is appearing limited to officetels," adding, "Villas have almost zero upside potential. To revitalize the market, measures such as excluding villas below a certain size from the one-house-per-household rule are needed."