The South Korean government's easing of loans for non-apartment homes, aimed at helping young first-time buyers, is drawing little interest on the ground. While borrowing limits have risen, few properties both meet the policy threshold of 400 million won ($289,000) or less and offer decent resale value. The average sale price of multi-unit low-rise homes in Seoul has already passed 400 million won, and most qualifying officetels — studio units used as either a home or an office — are tiny one-room spaces. Because non-apartment homes rarely appreciate, analysts say lowering the loan barrier alone will do little to ease young people's housing insecurity.
Under a comprehensive real estate financing package the government announced on the 13th, a new Youth Future Bogeumjari Loan will launch next January, applying a first-time loan-to-value (LTV) ratio of up to 80% when buyers aged 39 or under purchase a non-apartment home priced at 400 million won or less. Such buyers can also keep their preferential first-time LTV eligibility for a future apartment purchase, along with a preferential interest rate. The measure is meant to support home purchases that serve as a stepping stone, taking into account the practical housing needs of people early in their careers.
There are not many non-apartment properties for prospective buyers to choose from. According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system on the 23rd, 22,660 multi-unit low-rise homes were sold in Seoul from January through July this year (excluding public-agency transactions), at an average price of 428.52 million won. Over the same period, 5,541 officetels priced at 400 million won or less that were sold in Seoul had an average net floor area of just 28.30 square meters (about 8.56 pyeong). Such units either do not qualify for a loan or are too small even when one is available.
There is also little incentive to buy a non-apartment home when resale value is taken into account. According to the Korea Real Estate Board on the same day, the sale price index for officetels in Seoul rose just 3.17% from January 2018 to July 2026. Over the same period, low-rise multi-unit homes in Seoul rose 16.69% and apartments climbed 31.44%. Price gains were especially limited for smaller officetels. In July, the Seoul officetel sale price index for units of 40 square meters or less rose just 0.68% from a year earlier, while units larger than 85 square meters gained 4.3%. This is why some say that for young people who take out a loan to buy a non-apartment home and later hope to move up to an apartment, the move can weigh on both asset building and housing mobility.
Buyers could also purchase a property eligible for redevelopment in hopes of securing the right to move into a future apartment, but even in Seoul's lower-priced districts in the early stages of redevelopment, options are not plentiful. The head of one brokerage in Myeonmok-dong, Jungnang District, Seoul, said, "There are properties under 400 million won, but not many are actually livable," adding, "Young people in particular care about things like parking and the condition of the home, and it is hard to find properties that meet those conditions." A representative of another brokerage in Sillim-dong, Gwanak District, said, "Properties under 400 million won barely come onto the market," adding, "As soon as a project operator is designated, all the cheaper properties get snapped up, so now only expensive properties like detached houses are left."
Experts recommend policies tailored to the actual housing needs of young people. Shin Bo-yeon, a professor in the Department of Real Estate AI Convergence at Sejong University, said, "Rather than pushing people to buy non-apartment homes that have low resale value and do not rise in price, we need policies that let young people buy apartments," adding, "Equity-accumulation public housing sales priced at development cost could be of real help to young people's housing."
