“In the jeonse crisis, the real demand pushes the redevelopment demand for investment”… Villa deal, apartment doubled

With the sale of house prices and jeonse prices still rising, more and more end-users are turning to the purchase of multi-family or row houses that are cheaper than apartments. In addition, the government recently announced eight candidate sites for public redevelopment, adding to the expectations for the promotion of the maintenance project, and the demand for investment, and prices are also rising significantly.

According to data from the Seoul Real Estate Information Plaza on the 18th, the number of multi-family and row houses in Seoul last month was 1,620, an increase of 8.2% (578) from the previous month (4,268). Considering that there are still two weeks of reporting period left, the number of trades is expected to exceed 5,000.

Transactions for multi-family and row houses were less than 5,000 from January to May last year. However, it surged to 7538 cases in July, and reached the highest level in 12 years and 3 months since April 2008 (7686 cases). At the time, the industry cited’panic buying’ (panic buying) of the 20th to 30th generation as the direct cause of the increase in transaction volume.

Afterwards, in the aftermath of the July 10th and August 4th measures, the number of cases decreased sharply to 4350 cases in August and 4096 cases in September, but slightly rebounded to 4649 cases in October, and then declined again in November and then rebounded last month.

In the new year, the number of transactions this month is 701 by the 15th, which is nearly twice the number of apartment transactions (363) during the same period. The apartment transaction volume is generally 2 to 3 times larger on a monthly basis than multi-family/column housing transactions, but it is interpreted that the purchase trend was driven by multi-family and alliances as apartment prices rose significantly last year and real estate regulations were strengthened.

An official from S realtor, which is operating in Mok-dong, Yangcheon-gu, said, “After the enforcement of the new lease law at the end of July last year, apartment rental prices have risen to an absurd level. There are many newlyweds who are thinking about purchasing a clean new villa instead of an apartment that is difficult to access,” he pointed out.

In fact, after August, when the new lease law took effect, villa prices have risen sharply.

During the five months of July and December of last year, the average sale price of a row house in Seoul jumped by 20.65 million won from 290.81 million won to 31946 million won. This is equivalent to the increase in the previous two years (July 2018-July 2020) (2.78 million won). During the same period, the average rent for a row house in Seoul also rose by 10,433 million won (2,260,000 won → 2106.41 million won), which is equivalent to 14.28 million won in the previous two years and a month.

The expectation for development due to public redevelopment is also reflected in the rise of multigenerational and coalition prices.

The 3rd floor of the 32.85m2 (land area 19.13m2) for villas in Jangwi New Town was traded at 229 million won in July last year, but the price surged as a contract was written at 412 million won in December. Areas 8, 9, 11, and 12 of Jangwi New Town applied for public redevelopment, and the expectations were reflected in the price, according to officials from nearby realtors.

It is known that in Heukseok District 2 in Dongjak-gu, which was recently selected as a pilot project for public redevelopment, many households and households for sale have disappeared as inquiries to purchase have increased rapidly since the announcement.

Along with this, the fact that’gap investment’ is still possible is also affecting the inflow of investment demand.

Last year, the government restricted loans for chartered loans to apartments of 300 million won or more in regulated areas through the ‘6/17 measures’. However, multi-family and row houses were excluded from the application. In addition, even in the `7·10 measures`, which significantly revised the registration system for the housing rental business, the tax benefits for multi-family houses, villas, studios, and officetels remained as they were.

Urban Asset Management CEO Jeong Seong-jin said, “As the price of apartments has risen significantly, it has become a situation where it is impossible for end-users to buy them.” “The demand for buying villas as a residence by purchasing villas is expected to increase further.” .

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