Soaring Housing Prices Drive 'Nahollo Apartment' to Record Highs

'Less Increase Compared to Large Complexes' Popularity of Small Complexes Soars
Samho Hansup 84㎡ in Bangbae-dong Rises by 300 Million Won in One Year
Last Year's Subscription Competition Rate Hundreds to One
Overheating Expected in 10 Sales Locations This Year
"Low Liquidity, Buyers Should Be Cautious"

[Asia Economy Reporter Ryu Tae-min] As apartment prices in Seoul soar to unprecedented heights, the popularity of mini complexes, which had previously been overlooked by buyers, is also rising. Despite the government's successive measures to stabilize housing prices, the continued upward trend has led to increased buying activity based on the perception that prices in these smaller complexes have risen less. Consequently, it is expected that the overheating of subscription demand for small-scale complexes seen in the second half of last year will continue this year.

According to frontline real estate agencies and the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system on the 10th, the MV Apartment in Banpo-dong, Seocho-gu, Seoul, with an exclusive area of 83.4㎡, set a new record price of 1.54 billion KRW in November last year. This price is over 100 million KRW higher than the previous price of 1.439 billion KRW recorded in September of the same year. Built in July 1994, this complex consists of a single building with 154 households.

The price of Songpa-dongbu Centreville in Songpa-gu, consisting of four buildings with 206 households, is also on the rise. An 84㎡ unit in this complex was traded at 1.48 billion KRW in December last year, approaching the 'loan prohibition line.' The previous price for the same area in November last year was 1.388 billion KRW.

In Seocho-gu, Samho Hansup in Bangbae-dong stands out. An 84㎡ unit recorded 1.427 billion KRW in October last year, rising more than 300 million KRW compared to early last year. Units of 59㎡ and 114㎡ in this complex also set new record prices at 1.24 billion KRW and 1.53 billion KRW respectively at the end of last year.

A representative from nearby A Real Estate Agency stated, "Small-scale apartments tend to be relatively affordable, so the burden is lighter. Demand for standalone apartments in good locations has recently increased significantly."

Last Year’s ‘Record-Breaking Competition Rate’ Led to All Subscription Units Closing in First Priority... ‘Attention’ in This Year’s Subscription Market as Well

Small-scale complexes have been popular in the sales market since last year. According to Real Estate 114, all 14 apartment complexes with fewer than 300 households that were offered in Seoul last year closed their subscriptions in the first priority round. In particular, ‘Godeok Artes Misojieum’ in Sangil-dong, Gangdong-gu, recorded an unprecedented competition rate of 537 to 1, with 10,964 applicants for 26 units in the first priority round. ‘Seocho Xi Rene’ in Seocho-dong, Seocho-gu, with 67 units, and ‘Le L Shinbanpo’ in Jamwon-dong, Seocho-gu, with 280 units, also closed in the first priority round with competition rates of 300 to 1 and 124 to 1, respectively.

According to Real Estate 114, there are a total of 10 apartment complexes with fewer than 300 households scheduled for sale this year. Among them, The Sharp Banpo River Park (140 units) in Banpo-dong, Seocho-gu, and Jayang Haneulchae Verre (165 units) in Jayang-dong, Gwangjin-gu, are scheduled for sale this month. Bangbae Sinseong Villa Reconstruction (90 units) in Bangbae-dong, Seocho-gu, and Hwagok-dong The Live Mixed-Use Complex (140 units) in Hwagok-dong, Gangseo-gu, are also expected to be sold in the second half of the year.

However, experts advise that while small-scale apartments are cheaper than large complexes, one must consider that their infrastructure, such as community facilities and convenience amenities, is relatively poor.

Lim Byung-chul, Senior Researcher at Real Estate 114, explained, "Since small-scale apartments have lower liquidity compared to well-equipped large complexes, it is necessary to be cautious when deciding whether to purchase."