After Increasing the Real Estate Board Sample... Seoul Villa Average Sale Price Jumps 28.1% in One Month

[Asia Economy Reporter Ryu Tae-min] Due to an increase in the sample size by the Korea Real Estate Board, the average sale and jeonse prices of Seoul’s row houses and multi-family houses rose by about 30% in July compared to the previous month. This is the highest monthly figure since the Real Estate Board began compiling related statistics in January 2012.

On the 24th, Station3, which operates the real estate platform Dabang, analyzed the Real Estate Board’s average sale price statistics for villas and found that Seoul’s average price in July was 346.29 million KRW, up 28.1% from the previous month. The nationwide average sale price was 202.14 million KRW, rising 16% in one month.

By district and region, the sale price of villas in Seoul’s Gangbuk downtown area (Jongno, Jung, Yongsan districts) was 490.13 million KRW, up 37.9% from the previous month. This is 9.8 percentage points higher than the overall increase rate for Seoul. The sale prices of villas in the Gangnam southeast area (Seocho, Gangnam, Songpa, Gangdong) and the southwest area (Yangcheon, Gangseo, Guro, Geumcheon, Yeongdeungpo, Dongjak, Gwanak) recorded 505.47 million KRW and 290.15 million KRW, rising 33.7% and 32.1%, respectively.

During the same period, the average jeonse price of villas in Seoul also soared to 243 million KRW, up 31.5%. The Gangbuk downtown area reached 346.42 million KRW, a 56.9% increase, and the Gangnam southeast area surged to 354.86 million KRW, up 42.1%. The Gangbuk northwest area (Eunpyeong, Seodaemun, Mapo) recorded 210.12 million KRW, and the northeast area (Seongdong, Gwangjin, Dongdaemun, Jungnang, Seongbuk, Gangbuk, Dobong, Nowon) recorded 194.76 million KRW, rising 21.0% and 21.1%, respectively. The nationwide average jeonse price rose 15.5% to 137.91 million KRW.

The previous highest monthly increase rates for Seoul villa average sale and jeonse prices were 12.1% and 23.4%, respectively, in December 2017. This reflected the sample change when the Korea Appraisal Board, the predecessor of the Real Estate Board, adjusted its data in November 2017. Although the monthly sample size for this survey was 6,350 households, similar to before, the sample was redesigned, leading to a rise in sale and jeonse price increase rates. According to the Real Estate Board, new samples were extracted from the population considering the price distribution, resulting in larger fluctuations in sale and jeonse prices.

Not only in Seoul but also in Gyeonggi Province and other regions, villa sale and jeonse prices surged. In Gyeongbu Area 1 (Gwacheon, Anyang, Seongnam, Gunpo, Uiwang) of Gyeonggi Province, the villa sale price in July was 458.11 million KRW, up 62.9% from the previous month. During the same period, Jeonbuk rose 53.9% to 81.1 million KRW, and the Dongbusan area (Haeundae, Geumjeong, Dongnae, Gijang) in Busan rose 39.7%. Daejeon (36.9%) and Gangwon (32.7%) also showed increases exceeding 30%.

During the same period, the jeonse price in Gyeongbu Area 1 was 291.12 million KRW, up 54.0%. Jeonbuk rose 48.8% to 55.57 million KRW, Daejeon rose 39.6% to 76.34 million KRW, and the Dongbusan area rose 37.3% to 90.65 million KRW. Sejong (26.8%) and Gangwon (25.6%) also showed increases exceeding 25%.

A Dabang official said, "It seems that villa prices have soared mainly in Seoul due to buyers’ expectations that villa prices will follow apartment prices. The jeonse shortage has increased jeonse demand, supporting sale prices."