While apartment prices have slowed, single-family home sales are still on the rise.  The photo shows a view of a detached house in the metropolitan area (Maekyung DB).

7 years and 7 months upward march… Reasons for the soaring sales of single-family homes

Although the rise in apartment prices has slowed this year, the sale price of single-family homes is not paying attention. The sales price of single-family homes nationwide has continued to rise for seven years and seven months in a row.

While apartment prices have slowed, single-family home sales are still on the rise. The photo shows a view of a detached house in the metropolitan area (Maekyung DB).

▶ Competition for LH detached house site is fierce

According to the Korea Real Estate Agency, the nationwide single-family house sale price index in February this year was 101.9 (100 as of June last year), continuing an upward trend for 91 consecutive months since July 2014. In February, the nationwide apartment sale price index fell 0.02% from the previous month to 106.3, in contrast to the first decline in two years and five months since September 2019 (-0.05%).

The monthly rent for detached houses is also on the rise. The Jeonse price index for detached houses in February this year was 100.7, up 0.7% from June last year (100.0). During the same period, the monthly rent integrated price index, including the reversal trend, also rose 0.4% to 100.4. The supply of detached houses is also gradually increasing. The number of detached houses completed last year was 39,017, which is an increase of 10% from 2020 (35,496 households). This is due to the steady increase in demand for single-family homes. At the same time, the transaction volume is also increasing. Although it has been on a downward trend since 2017 (162,673 cases), it is continuing to recover again with 155,783 cases in 2020 when the COVID-19 epidemic began.

As detached houses are gaining popularity, the number of people looking for land for detached houses sold by the Korea Land and Housing Corporation (LH) has also increased. In September last year, LH supplied all the land for a single-family house with a store in Unjeong 3 District, Paju, Gyeonggi-do, to find the owner. The winning bid was also decided at a price that was 400 million won higher than the expected price (377.1 million to 68,482 million won). The highest successful bid price is 12,1481 million won, which is almost twice the expected price (64.38 million won).

Previously, all 19 plots of land for single-family houses, which were recruited in Ayang District, Anseong, Gyeonggi-do in August, also found their owners. The expected price was 316.47 million won, and the highest was 369.7 million won.

It is analyzed that the revival of the detached house market was influenced by the importance of comfort in living spaces in the aftermath of the spread of COVID-19. The steady demand for detached houses in the suburbs with a pleasant environment away from the stuffy city center also acted as a variable. The price of detached houses is gradually rising as expectations for redevelopment projects are growing in old housing clusters in downtown Seoul and the metropolitan area. Detached housing land is also mainly supplied to residential districts in new towns, so there is a high expectation that it will guarantee some degree of profitability.

As the government tightened loan regulations, it was difficult to raise funds to purchase an apartment, but the land for detached houses is different. In the case of single-family housing sites sold by LH, it is evaluated that the conditions are not bad, such as paying only 10% of the down payment and applying an interest rate of 2% to the remaining 90%.

Experts predict that the popularity of detached houses will continue for the time being. This is because, as apartment prices surge, demand for detached houses as an alternative to apartments is not small.

Kwon Il, head of the Real Estate Info research team, said, “Detached houses are a substitute for apartments whose prices have skyrocketed. The value can be increased through remodeling, and even though the area is the same as that of an apartment, the actual use area is wide, so the advantage is that various spaces can be utilized.”

[글 김경민 기자 사진 매경DB]

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