As demand surges for villas located in redevelopment zones in Seoul, some properties are seeing premiums exceeding 100 million won. With the rise in mid-range apartment prices, buyers are shifting towards villas, which require relatively lower financial burdens and offer potential improvements in living conditions through urban redevelopment.
In the Jangwi-dong area of Seongbuk-gu, villas have been observed with premiums around 100 million won due to redevelopment expectations. A local real estate agent noted on September 3 that "currently, a premium of about 100 million won is forming on villas."
One villa in the Jangwi 14 district, identified as a target for urban complex development, has a land area of about 10 pyeong and a building area of approximately 16 pyeong. While the assessed price for the apartment is in the mid-300 million won range, the sale price is around 500 million won.
Interest in villas is rising not only in Jangwi-dong but also in major redevelopment areas such as Bukahyeon-dong, Noryangjin-dong, and Geoyeon-Macheon-dong. Buyers are increasingly seeking villas as a more accessible option compared to apartments, which require several hundred million won, while anticipating value increases from future redevelopment projects.
The overall villa market in Seoul is also showing signs of recovery. According to an analysis by Real Estate Planet of transaction data from the Ministry of Land, Infrastructure and Transport, the number of villa transactions in Seoul reached 11,536 in the second quarter of this year, with a total transaction value of 4.9346 trillion won. Both transaction volume and value are at their highest levels in the past five years.
Notably, there has been a significant increase in purchases by those in their 20s and 30s. In the second quarter of this year, the number of villas bought by this age group rose by 67.3% compared to the same period last year. This trend suggests that younger buyers, facing high financial burdens when purchasing apartments, are turning to the more accessible villa market.
The rise in apartment prices in Seoul is also seen as a factor driving demand for villas. With the average price of apartments now exceeding 1.6 billion won, the upward trend in prices for mid-range apartments has made it difficult for many to enter the apartment market, prompting them to seek alternatives. Particularly, villas in redevelopment areas offer the prospect of receiving new apartment allocations upon project completion, attracting buyers who are willing to endure less favorable living conditions in the short term for long-term benefits.
Kim Je-kyung, CEO of Tumi Real Estate Consulting, stated, "As the prices of new apartments rise and regulations on loans and land transactions make gap investments more challenging, demand is shifting towards redevelopment villas, which require relatively lower financial burdens." He added, "The premiums on redevelopment villas reflect expectations for future new apartment allocation rights."
However, experts caution against purchasing villas solely based on redevelopment expectations. Kim advised that buyers should at least consider areas where the establishment of a cooperative has been approved, noting that it can take over ten years from cooperative approval to occupancy. He warned that early-stage areas before cooperative establishment carry significant risks in terms of project viability and progress, making them less suitable as initial investment options.
Moreover, the value of villas in redevelopment areas can vary significantly based on land share, even among properties with similar prices. Buyers should carefully check individual property conditions, including project stages, rights assessment dates, inclusion in redevelopment zones, eligibility for cooperative allocations, and road frontage.
* This article has been translated by AI.
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