[Asia Economy Reporter Hwang Seoyul] The proportion of small villa sales transactions in the Seoul villa (row house and multi-family) market recorded the highest level ever for the first quarter.
On the 24th, Real Estate R114 analyzed the actual transaction price data from the Ministry of Land, Infrastructure and Transport and found that among the total villa sales transactions in Seoul in the first quarter of this year (7,619 cases), the proportion of transactions for properties with exclusive area of 60㎡ or less was 89.5% (6,818 cases). This is the highest figure for the first quarter since the actual transaction price survey began in 2006.
The main reason for the increased proportion of small-sized villa transactions in Seoul villa sales can be found in the sharp rise in apartment prices. In 2020 and 2021, Seoul apartment prices rose by about 14% annually, and during this period, transactions of small villas with exclusive area of 60㎡ or less reached a record high of about 48,000 cases per year. It is analyzed that real demand buyers with lower income and assets, who found it difficult to purchase apartments, bought relatively affordable small villas.
In fact, among villas with exclusive area of 60㎡ or less, transactions priced at 300 million KRW or less accounted for 61.2% (4,170 cases), making up the majority. The proportion of transactions priced at 600 million KRW or less, which are eligible for low-interest policy loans such as the Bogeumjari and Didimdol loans, is 98.0%.
Interest in small villas in Seoul is expected to increase further this year. This is because there are predictions that jeonse prices will rise due to lease contract renewals expiring at the end of July. With the rise in jeonse prices, some tenants may consider purchasing small villas, which have a lower financial burden.
Investment demand inflow is also expected due to anticipation of real estate regulation easing policies promised by President-elect Yoon Seok-yeol. On the 30th of last month, the Presidential Transition Committee reportedly considered excluding small villas (with exclusive area of 59㎡ or less) from the total housing count to promote private rental housing.
However, since villas have lower residential preference and liquidity compared to apartments, careful consideration is necessary when purchasing for investment purposes.
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