[Edaily PARK JI-AE Reporter KIM HYUNG-HWAN ] #Mr. Im, a man in his early 30s who is about to get married, purchased a villa in Seocho-gu, Seoul—located near a redevelopment site—as a “gap investment” using 300 million won he had saved with his girlfriend. He had originally considered taking out a loan to buy an older apartment in the Seoul metropolitan area. Although redevelopment in the neighborhood where the villa is located has not yet been finalized, redevelopment projects are underway throughout Seocho-gu, and he concluded that this was the only way to move into a newly built apartment in a prime Seoul location in the long term.

As housing prices have skyrocketed and loan restrictions have compounded the problem, raising the barriers to entry for apartment purchases, young people in their 20s and 30s are turning their attention to non-apartment investments (such as villas and townhouses). Interest among young people has grown even more recently as the government introduced policy-backed financial products to support the purchase of non-apartment properties priced at 400 million won or less. However, experts advise that there are many points to consider when investing with the goal of redevelopment, as there are high risks—such as project delays.

According to the Korea Real Estate Board on the 18th, purchases of non-apartment properties by people in their 20s and 30s totaled 8,428 from January to June this year, a staggering 67.3% increase compared to the same period last year (5,037). This is the highest figure in the past five years. During the same period, purchases of non-apartment properties by the 40-50 age group rose by 19.6%, from 8,494 to 10,161. Although the number of purchases by those in their 20s and 30s is lower than that of middle-aged and older adults, it is evident that interest in non-apartment properties among this age group has significantly increased over the past year.

Furthermore, interest in villa redevelopment is surging following the government’s recent launch of the “Youth Future Home Loan,” a program designed to help young people purchase non-apartment homes priced at 400 million won or less. This program applies a loan-to-value (LTV) ratio of up to 80% to first-time homebuyers aged 39 or younger purchasing non-apartment properties priced at 400 million won or less. First-time homebuyer LTV preferential rates remain in effect even when using this program.

However, caution is advised regarding villa properties that can be purchased with 400 million won, as many are located in areas with low profitability or where the likelihood of redevelopment projects is low. In fact, in low-rise residential areas along the Han River—where expectations for redevelopment are high—many villas are priced well over 2 billion won. Experts warn that investing a large sum in areas that have not yet been designated for redevelopment or that do not meet eligibility criteria, such as those with aging infrastructure, could actually result in losses.

Song Seung-hyun, CEO of City and Economy, explained, “It is difficult to find properties within the 400 million won price range in areas where projects are already underway or where profitability is assured.” He added, “If you approach investment based on vague expectations, you’ll likely end up purchasing a home in the early stages of a project or choosing a property with a small floor area—which not only lowers residential satisfaction but also makes it difficult to guarantee the success of your investment.”