Seoul Villa Sale Prices Soar 28% After Changing Sample... Jeonse Prices Also Rise 31%

[Asia Economy Reporter Kim Hyemin] Due to changes in the sample by the Korea Real Estate Board, the average sale price of Seoul’s row houses and multi-family houses (hereafter referred to as "villa") rose by more than 28% in just one month.

On the 24th, Station3, which operates the real estate platform "Dabang," analyzed the Korea Real Estate Board’s average villa sale prices and found that last month, the average price in Seoul was 346.29 million KRW, up 28.1% compared to the previous month. The nationwide average sale price was 202.14 million KRW, rising 16% during the same period.

By region, the average villa sale price in Seoul’s Gangbuk downtown area (Jongno-gu, Jung-gu, Yongsan-gu) was 490.13 million KRW, increasing 37.9% in one month. 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 respectively, rising 33.7% and 32.1%.

Last month, the average villa jeonse price in Seoul also rose 31.5% from the previous month to 243 million KRW. The Gangbuk downtown area surged 56.9% to an average of 346.42 million KRW. Both sale and jeonse prices are the highest monthly figures since the Korea Real Estate Board began compiling related statistics in January 2012.

Dabang explained that the sharp rise in both sale and jeonse prices within a month is largely due to the Korea Real Estate Board’s redesign of the sample. Although the monthly sample size remained unchanged at 6,350 households, the Board extracted a new sample from the population considering the price distribution.

As a result, villa sale and jeonse prices also surged in Gyeonggi Province and non-metropolitan areas. The villa sale price in Gyeonggi’s Gyeongbu 1 area (Gwacheon, Anyang, Seongnam, Gunpo, Uiwang) rose 62.9% in one month to 458.11 million KRW. Jeonbuk also increased 53.9% to an average of 81.1 million KRW. The Busan East Busan area, including Haeundae (39.7%), Daejeon (36.9%), and Gangwon (32.7%) showed increases exceeding 30%.

Jeonse prices in Gyeonggi’s Gyeongbu 1 area rose 54% in one month to 291.12 million KRW. Jeonbuk (48.8%), Daejeon (39.6%), Busan East Busan area (37.3%), and Sejong (26.8%) also showed high growth rates.

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