"Can't Buy Seoul Apartments Because They're Expensive"... People Flocking to Villas

Increase in Multi-family and Row House Transactions for 2 Consecutive Months
Apartment Transactions Decrease for 4 Consecutive Months, Showing Contrast
Impact of Redevelopment Expectations Following Seoul Mayor Oh Se-hoon's Election

[Asia Economy Reporter Onyu Lim] The volume of transactions for multi-family and row houses, commonly referred to as 'villa' in Seoul, has increased for two consecutive months. This trend contrasts with apartment transactions, which have decreased for four consecutive months. As both apartment sale prices and jeonse (long-term lease) prices have surged significantly, buyers appear to be turning to relatively affordable villas. In some areas, the election of Seoul Mayor Oh Se-hoon has raised expectations for redevelopment, leading to active trading of aging villas.

According to the Seoul Real Estate Information Plaza on the 25th, the number of multi-family and row house sales transactions in Seoul last month was 5,330, an increase of 1,146 transactions (27%) compared to 4,184 in the same period last year. The transaction volume for multi-family and row houses was 4,433 in February and rose to 5,096 in March, marking two consecutive months of growth.

Conversely, apartment transaction volumes have been declining for four consecutive months. From 7,527 transactions in December last year, the numbers dropped to 5,777 in January, 3,866 in February, 3,768 in March, and 3,482 in April this year.

Typically, apartment transaction volumes are more than twice those of multi-family and row houses, but this year, the transaction volume reversal has persisted for four months, which is noteworthy. Although there is about a week left in the reporting period, the trend is unlikely to change.

As demand for multi-family and row houses increases, prices have steadily risen. According to KB Live Real Estate, the average sale price of row houses in Seoul surpassed 300 million KRW for the first time in August last year at 301.13 million KRW, then rose to 313.43 million KRW in November, 322.07 million KRW in January this year, and 326.48 million KRW last month, continuing the upward trend.

Experts believe that amid the panic buying that caused apartment prices to surge last year, tightened loan regulations, and the implementation of the new Housing Lease Protection Act that pushed jeonse prices higher, non-homeowners have turned to purchasing affordable villas. A representative from real estate agency A in Ha Wangsimni-dong, Seongdong-gu, Seoul, explained, "Single office workers or newlywed couples tend to look for villas. Since apartment prices have risen so much and paying jeonse interest is costly, they prefer to buy newly built villas near subway stations that are convenient for commuting."

In some areas, expectations for redevelopment have increased following Mayor Oh's inauguration, leading to active purchases of aging villas for investment purposes. Mayor Oh pledged to supply 180,000 housing units over five years by easing redevelopment and reconstruction regulations. In Dobong-gu, the transaction volume for multi-family and row houses in April reached 574, the highest ever recorded. Particularly in Banghak-dong, where old villas are concentrated, the transaction volume surged from less than 100 per month to 226 in April. A representative from real estate agency B in Banghak-dong said, "Mayor Oh promised to develop Changdong Station into a hub like Gangnam Station, which has increased investor interest in old villas around Changdong and Banghak-dong. Since the promotion committee has not yet been established, investments are possible with small amounts around 10 million KRW, attracting even young people."

This content was produced with the assistance of AI translation services.