Seoul Villa Sales Volume Surpasses Apartment Sales for 13 Consecutive Months... Gap Widens Further

View of a villa neighborhood from a building in Yangcheon-gu, Seoul. / Photo by Moon Honam munonam@

[Asia Economy Reporter Ryu Tae-min] In Seoul's housing sales market, the volume of villa (multi-family and row houses) sales has surpassed that of apartments for 13 consecutive months. Villas, which are relatively more affordable than apartments, seem to be gaining popularity as a means for ordinary citizens with reduced loan limits to secure their own homes.

According to the Seoul Real Estate Information Plaza on the 1st, last month there were 1,447 villa sales (based on contract date) in Seoul, approximately 2.7 times the 537 apartment sales. Although there is still a deadline for transaction registration reporting, which could affect the numbers, it is expected that the trend of villa sales exceeding apartment sales will be difficult to reverse.

Until 2020, apartment sales volumes were typically 2 to 3 times higher than villa sales. This is because villas were perceived as less liquid and their prices did not rise as much, leading homebuyers to generally prefer apartments over villas.

However, from January last year through last month, villa sales have surpassed apartment sales for 13 consecutive months. During this period, apartment prices surged rapidly, causing fatigue among buyers, and combined with loan regulations and interest rate hikes, the number of apartment transactions has sharply declined.

In Seoul, apartment sales have been decreasing for six consecutive months: 4,703 in July last year, 4,217 in August, 2,705 in September, 2,205 in October, 1,371 in November, 1,117 in December, and 537 in January this year.

On the other hand, Seoul villa sales have been decreasing for eight consecutive months since May last year (6,024 → 5,492 → 4,853 → 4,519 → 4,198 → 4,139 → 3,480 → 3,340 → 1,447), but the decline is not as steep as that of apartments, widening the gap between the two.

This phenomenon is interpreted as villas, which are relatively cheaper than high-priced apartments, being less affected by loan regulations. From this year, new loans exceeding a total loan amount of 200 million KRW are subject to the Debt Service Ratio (DSR) for individuals, making it increasingly difficult for some to obtain loans and purchase homes.

Additionally, villas priced under 900 million KRW have the advantage that, unlike apartments, non-homeowners purchasing them can also receive separate jeonse (long-term deposit lease) loan funds.

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