▲A panoramic view of the villa-dense area in downtown Seoul. (Reporter Go Iran photoeran@)
The recession in the villa (row/multi-family housing) market is deepening. In the apartment market, prices are rising and there is a clear recovery in transaction volume, especially in Seoul, but the villa market is sluggish in both sales, leases, and auctions. Experts predict that it will be difficult to rebound in the short term as the rental market, which is the core of villa demand and supply, has collapsed.
According to housing statistics from the Ministry of Land, Infrastructure and Transport on the 6th, overall housing sales in March rebounded, increasing 0.9% compared to the same month last year. Apartments led the increase in transaction volume. Villa transaction volume decreased. As of March, the number of house sales was 52,816, of which approximately 40,000 apartments were sold, a 3.4% increase compared to the same month last year. The number of non-apartments was 12,000, a decrease of 6.1% compared to the same month last year.
Villa prices are continuing to decline along with a slump in transaction volume. The Korea Real Estate Agency’s villa sales price index was 98.2 nationwide in March, falling for five consecutive months since November of last year. This index is trending downward from 100.3 in January last year. Except for a slight increase from 98.6 to 98.7 during the recovery in apartment prices in the second half of last year, the downward trend continues.
Concerns over tin rent still remain. According to the Real Estate Institute’s Rental Siren, villa rental rates are rising again. The rental rate for the past three months based on villas nationwide was 71.6%, up 0.07 percentage points (p) compared to 70.9% in January. The provincial rate was 74.5% in March, an increase of 1.9 percentage points compared to 72.6% in January, which is twice the national average increase. Based on Seoul, it rose from 70.4% in January to 71.1% in March, and in particular, Jung-gu (84.5%), Seodaemun-gu (82.8%), and Gangseo-gu (80.1%) had a jeonse rate of 80%, which is a risky level for tin rent, as of March. It was calculated that it exceeded.
Recently, in the villa rental market, the demand for rental has decreased due to rental fraud and the rental price has fallen, causing the villa rental rate to fall to the 70% range early this year. However, it is interpreted that the jeonse rate has actually risen as the decline in sale prices has been greater than the decline in jeonse prices.
Soo-min Yoon, real estate expert at NH Nonghyup Bank, said, “Villas are an alternative to apartments and have the meaning of actual residence and ownership, but above all, they have established themselves as a type of housing with a stronger rental-based investment purpose.” “As the market collapsed and was reorganized into monthly rent, both jeonse and sale prices fell,” he said.
In particular, the outlook for the villa sales market is unclear as it has recently shown a phenomenon of ‘decoupling’ with the apartment market. The existing villa market tended to recover when the apartment market showed signs of recovery first, but this year’s villa market is in complete recession. Although the Seoul apartment market is reviving, the recovery of the villa market cannot be guaranteed.
In fact, villa avoidance continues even in the auction market, which is a leading indicator of the sales market. According to GG Auction, a company specializing in court auctions, the final winning bid for the 42㎡ S Villa in Guro-gu, which was held at the 6th auction of the Seoul Southern District Court on the 2nd, was decided at KRW 193 million, which is 68% of the initial appraised price of KRW 282 million. done. There were only two bidders. The success rate in Seoul villa auctions last month, as calculated by GG Auction, was around 15.0%, remaining at a similar level to the end of last year. On the other hand, the apartment success rate in Seoul increased every month and exceeded 47% last month. This is the highest level in 22 months.
Commissioner Yoon said, “Recently, the villa market has a strong transitional aspect from jeonse to monthly rent, so the possibility of a short-term rebound is not high.” He added, “Villa prices may rise in the long term as the supply of villas decreases, but this will take a long time.” He said.