Redevelopment Villas Double in Price, Comprehensive Real Estate Tax Hits Multi-Family Homes... Why Are Official Prices Surging? [Real Estate AtoZ]

Villas in Gwangjin and Seongdong Districts See Surge in Demand Ahead of Redevelopment
Official Assessed Prices Soar, Increasing Likelihood of Higher Property Taxes

In the area adjacent to the Han River in Gwangjin-gu, Seoul, the officially assessed price of a villa has doubled in just one year. The 61-square-meter unit on the first floor was valued at 552 million won last year, but the price disclosed on March 18 this year is 1.11 billion won.

The neighboring homes have seen similar increases. This is a small complex of four two-story buildings, nearly 50 years old, totaling 50 households. In some cases, the official price exceeds 1.2 billion won, the threshold for what is considered a "high-priced" home. If a homeowner has held a property solely in their name for about six years, they would be required to pay approximately 240,000 won in comprehensive real estate holding tax.

The Jayang 4-dong area, including this villa, was designated as a Rapid Integrated Planning Zone by the Seoul Metropolitan Government in 2024. It borders the redevelopment project in the Seongsu Strategic Maintenance Zone, which is being pursued in four districts. The rise in official prices appears to be driven by last year's influx of investment demand. With few units on the market, transactions are rare; however, in May of last year, a unit was traded at around 1.42 billion won, and by October, a deal was made at 1.95 billion won.

On the 27th, as apartment prices in Seoul have recently increased significantly, villa prices are rising rapidly. Housing prices, including apartments and villas in Seoul, are expected to continue rising for the time being due to optimistic market sentiment. The photo shows a villa district in downtown Seoul as seen from Namsan Mountain. 2025.06.27 Photo by Dongju Yoon

Villa areas in Seongdong-gu, where large-scale development projects have attracted attention, have also seen significant increases. A 29-square-meter villa near the Han River rose from 663 million won last year to 1.03 billion won this year, a 66% increase. A multi-family home in Seongsu-dong with a floor area of 63 square meters increased from 1.157 billion won last year to 1.926 billion won this year. Until last year, these properties were not subject to the comprehensive real estate holding tax, but starting this year, even if a property is held jointly with only half the equity, it is highly likely to become subject to the tax.

In particular, there have been cases of exceptional price increases in redevelopment complexes in the Gangnam area. The 64-square-meter unit in Hansin Serae, Seocho-gu, rose from 1.152 billion won last year to 2.01 billion won this year, an 82% increase. This is a relatively small complex of about 200 households, but as discussions about integrated redevelopment with two nearby small complexes emerged, investment demand surged. Transaction prices last year also increased by around 1 billion won.

Villa sale advertisement posted at a real estate agency in Eunpyeong-gu, Seoul. Photo by Yonhap News Agency

The official price increase rate for multi-family housing in Seoul this year was 18.67%, marking the highest level in five years. In the so-called "Gangnam 3 districts," where demand is concentrated for prime, high-priced homes, the increase rate far exceeded 20%. Seongdong-gu, Gwangjin-gu, and Dongjak-gu also saw increases of over 20%, mainly driven by speculative demand flowing into select redevelopment and maintenance project sites, as seen in the earlier examples. On average, apartments have shown a higher rate of increase than row houses or multi-family homes, but some regions have experienced unusual situations.

Given the sharp increase in official prices, there is growing interest in whether there will be a surge in submissions of opinions or objections due to concerns about future tax burdens. However, for homes subject to maintenance projects, a higher official price can be advantageous when calculating the value of association members' rights, which makes the calculations more complex for each homeowner. An official from Gwangjin District Office said, "There have not been many submissions of opinions since the start of the review period, so we will have to monitor the situation through next month."

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