As Apartment Market Freezes, Villa Deals Also Plunge... Monthly Transactions on Track to Fall Below 1,000

Despite tighter regulations on apartments, Seoul’s villa market—row houses and multi-family homes—has yet to show a clear rebound. In particular, transaction volume has dropped sharply this month, raising expectations that it could fall below 1,000 deals. Market participants say buying sentiment remains weak amid a regulatory environment that is unfavorable to multiple-home owners.
■ 3,204 sales... Half of the peak level
According to the Actual Transaction Price Disclosure System of the Ministry of Land, Infrastructure and Transport on the 22nd, Seoul recorded 649 sales of row houses and multi-family homes so far this month. That is only about one-third of the 2,229 transactions in February last year. Even taking into account the Lunar New Year holidays and the fact that the month is not yet over, a steep decline appears unavoidable.
Sales of villas in Seoul briefly rebounded in September (3,559 cases) and October (3,510 cases) last year, but then fell to 2,643 in November and 2,941 in December after the October 15 Housing Supply Measures. The figure rose to 3,204 in January this year, yet this still falls far short of expectations that villas would benefit from stricter apartment regulations. At the height of the villa investment boom in January 2021, transactions reached 6,323.
Market observers note that buying sentiment has not recovered sufficiently. A real estate agent commented, “Regardless of the end of the temporary easing of capital gains tax surcharges, villa listings have been coming onto the market continuously for the past one to two years, but only a limited number are actually closing,” adding, “Because this is not a market where prices are surging, end users are also approaching purchases very cautiously.”
An agent in the Garak Market area of Songpa District said, “Some areas with redevelopment potential are seeing deals close with added premiums, but such activity is confined to a few locations,” and continued, “For most ordinary villas, price fluctuations are modest, so demand from investors seeking capital gains is limited. Purchases are centered on rental purposes or owner-occupation.”
■ Over 10,000 lease deals... Reliance on rentals persists
In contrast to the lukewarm sales market, reliance on the rental market remains high. In January this year, Seoul recorded 11,403 lease transactions—both jeonse lump-sum deposits and monthly rentals—for row houses and multi-family homes, up from 10,518 in January last year. That is more than three times the number of sales transactions.
However, it is still difficult to say the rental market is fully stable. In some areas, jeonse deposit prices are approaching sale prices, and the shift toward monthly rentals continues. Lingering anxiety over non-apartment properties following a series of rental scam cases is another source of concern. Recent policy changes, such as tighter lending conditions for rental business operators, also remain as variables.
Analysts say that with both purchase burdens and rental uncertainties at play, it will be hard for Seoul’s villa market to find its own driver for a rebound. Park Won-gap, Chief Real Estate Expert at KB Kookmin Bank, stated, “Just because one specific type of housing is bound by regulations does not mean other types automatically enjoy spillover benefits,” and added, “Unless overall market sentiment toward transactions improves, it will be difficult for villas alone to stage a separate rebound.”
en1302@fnnews.com Jang In-seo Reporter