Apartment sales hit record high as Koreans shun 'villa king' scams

Economy

Published: 20 May. 2024, 17:33

Apartment sales hit record high as Koreans shun 'villa king' scams

A neighborhood in Seongbuk District,northern Seoul, with multiplex housing and apartment complexes [YONHAP]

The proportion of apartment sales among housing transactions hit an all-time high in the first quarter as Koreans avoided purchasing other types of properties, such as detached houses or low-rise multiplex housing.

The portion of apartments reached 75.8 percent of sales during the period, up 1.6 percent over a year ago, according to the Korea Real Estate Board. The figure marks the highest for any year since the data was first collected in 2006.

The tendency came as fraudulent cases by some landlords of non-apartment properties — dubbed "villa kings" by the Korean press — have been uncovered over the past years.

One of the initial cases, first publicized in 2022, involves a man surnamed Kim who left over 1,000 tenants, mostly living in the Gyeonggi area, empty-handed without getting their jeonse lump-sum deposits back.

Other masterminds with a similar scheme were found the following year.

The cases turned many off to renting non-apartment residences, which are mostly cheaper than high-rise apartment complexes.

The share of apartments out of all transactions shot up to 74.2 percent last year, up 15.5 percent on year.

Higher demand for apartment complex units is pushing up prices, with data from the Korea Real Estate Board showing that prices for such homes in Seoul rose 0.13 percent in April compared to the previous month.

The price of apartments in other regions, however, saw a decline of 0.14 percent.

Meanwhile, the price of jeonse contracts for multiplex housing went down by 0.01 percent in Seoul and 0.06 percent nationwide.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]