'Less Increase Compared to Large Complexes' Popularity of Small Complexes Soars
Samho Hansup 84㎡ in Bangbae-dong Rises 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 ‘small-scale apartments (with 300 units or fewer, typically one or two buildings)’, which had been largely overlooked by buyers, is increasing. Despite the government’s successive large-scale supply measures, housing prices continue to rise, leading demand to shift toward relatively less expensive small-scale apartments as a means of ‘owning a home.’ Because of this, it is anticipated that the overheated subscription market for small-scale complexes seen in the second half of last year will continue this year as well.
According to the Ministry of Land, Infrastructure and Transport’s real transaction price disclosure system on the 12th, 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. This complex, completed in July 1994, consists of a single building with 154 households, making it a small-scale apartment.
The price of Songpa-dong Bus Centreville in Songpa-gu, consisting of four buildings and 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 threshold.’ The previous price for the same area in November last year was 1.388 billion KRW, marking an increase of about 100 million KRW in just one month.
In Seocho-gu, Samho Hansup in Bangbae-dong stands out. The 84㎡ unit recorded 1.427 billion KRW in October last year, rising more than 300 million KRW compared to early last year. The 59㎡ and 114㎡ units in this apartment also set new record prices at the end of last year, at 1.24 billion KRW and 1.53 billion KRW respectively.
A representative from a real estate agency in Banpo said, “Small-scale apartments tend to be more affordable, so the burden is lighter. Unlike before, small-scale apartments in good locations have recently seen a significant increase in resident demand.”
Recently, expectations for public redevelopment and public reconstruction have also risen, suggesting that demand will increase further. In January, Assemblyman Cheon Junho of the Democratic Party proposed an amendment to the ‘Special Act on Vacant Houses and Small-scale Housing Maintenance’ to introduce public participation models similar to public redevelopment and public reconstruction for ‘mini reconstruction’ projects targeting small housing complexes with fewer than 200 households.
Last year, all subscription units closed with ‘record-high competition rates’... Expected to attract attention in this year’s subscription market as well
Small-scale apartments have gained significant popularity not only in sales but also in the subscription market since last year. According to Real Estate 114, a total of 14 small-scale apartment complexes with 300 units or fewer were offered for sale in Seoul last year, all of which closed with first-priority subscription applications.
The most competitive complex in Seoul last year was ‘Godeok Artes Misojium’ in Sangil-dong, Gangdong-gu, which recorded a record-breaking competition rate of 537 to 1, with 10,964 applicants for 26 units. ‘Seocho Xi Rene’ in Seocho-dong, Seocho-gu, consisting of two buildings and 67 units, attracted 10,507 applicants for 35 general sale units, resulting in a first-priority subscription competition rate of 300 to 1. ‘Le L Shinbanpo’ in Jamwon-dong, Seocho-gu, with a total of 280 units, followed with 8,358 applicants for 67 units, achieving a competition rate of 124 to 1.
According to Real Estate 114, there are a total of 10 small-scale apartment complexes with 300 units or fewer 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. Additionally, Bangbae Shinsung 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 expected to be sold in the second half of the year.
Small-scale apartments are generally built on narrow plots of land within regular residential areas or between multiple apartment complexes, with 300 units or fewer and one or two buildings. Although they are cheaper than large-scale apartment complexes, their infrastructure such as community facilities and convenience amenities is relatively poor. Because fewer people seek them out, the number of transactions is low, making it difficult to expect significant capital gains.
Lim Byung-chul, senior researcher at Real Estate 114, analyzed, “As housing prices have generally risen sharply, demand for relatively affordable small apartments has increased compared to large-scale apartment complexes.” However, he added, “Since their liquidity is lower than well-equipped large-scale apartment complexes, it is necessary to keep in mind the possibility of a stagnant phase with reduced transaction volumes.”
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