Seoul villa sale prices rose faster than apartment prices for the second straight month. As apartment sale prices jumped and jeonse listings thinned, both end-user demand and redevelopment investment demand appear to have flowed into villas, which are relatively cheaper.
According to the Korea Real Estate Board (REB) on the 29th, Seoul's row house and multi-household sale price index in on-the-record transactions was 166.3 in June, up 3.43% from the previous month. Over the same period, the rise in Seoul apartment on-the-record sale prices was 2.50%. The on-the-record price index sets prices in November 2017 at 100 and shows changes in prices of actually transacted dwellings.
Villa price growth in on-the-record transactions outpaced apartments for two consecutive months. Seoul row house and multi-household on-the-record prices fell in April but surged 3.45% in May. At that time, the apartment increase was 1.35%. In June, villa growth slowed somewhat but was 0.93 percentage point higher than apartments.
Seoul's villa market slumped after 2022 as a string of jeonse fraud cases caused transactions to plunge. Recently, however, as apartment prices in Seoul have risen sharply and jeonse supply has contracted, villas, with their relatively lower price burden, are drawing attention again as an alternative place to live.
According to KB Real Estate, the average sale price of Seoul apartments this month was 1.60739 billion won, topping 1.6 billion won for the first time. Jeonse listings for Seoul apartments tallied by Asil, a real estate big data platform, stood at 20,352 as of the 26th, down 12.6% from the end of last year.
The scale of transactions also grew. RealtyPlanet's analysis of on-the-record price data from the Ministry of Land, Infrastructure and Transport showed that second-quarter sales of Seoul row houses and multi-household homes this year were 11,536, up 24.4% from the same period last year. Transaction value rose 31.1% to 4.9346 trillion won. By quarterly transaction value, it was the largest in five years since the second quarter of 2021.
Government support measures for non-apartment homes are also expected to become a market variable going forward. In the dwellings fast-track supply plan released on the 13th, the government decided to extend until the end of 2028 the special rule that excludes small newly built dwellings from the dwelling count when calculating acquisition tax, comprehensive real estate tax, and capital gains tax. The targets are dwellings with an exclusive area of 60 square meters or less that are completed between Jan. 2024 and Dec. 2028, with acquisition prices at or below 600 million won in the Seoul metropolitan area and 300 million won in the provinces.
In January next year, the Youth Future Bogeumjari Loan is also scheduled to launch. Young first-time homebuyers age 39 or under without a home who purchase villas and officetels priced at 400 million won or less and with an exclusive area of 85 square meters or less can receive a policy loan with a maximum loan-to-value (LTV) ratio of 80%.
A real estate expert said, "With deregulation of redevelopment projects, people in their 20s and 30s are showing interest in so-called 'body-tech,' in which they actually live in old villas while waiting for redevelopment," adding, "However, because the feasibility of redevelopment and the requirements for obtaining move-in rights vary by villa, buyers should carefully check the status of each project."