Seoul Small Apartments Average 800 Million Won... The Wall for 'Owning a Home' Gets Higher

Average Price of Small Apartments 770 Million KRW... Soars by 140 Million KRW in One Year
Newlyweds and Young Adults Face Higher 'Homeownership' Barriers
Demand Concentrates on Small Units with Fewer Loan Restrictions

A view of the surrounding apartments from the observation deck of Lotte World Tower in Songpa-gu, Seoul. Photo by Asia Economy DB

[Asia Economy Reporter Ryu Tae-min] Due to the rapid rise in housing prices, the average price of small apartments under 60㎡ (exclusive area) in Seoul has also approached 800 million KRW. Prices of old mid- to low-priced small apartments have surged not only in the city center but also in the outskirts, raising concerns that the barrier for young people to own a home has become even higher.

According to KB Kookmin Bank's monthly housing price trend report on the 8th, the average sale price of small apartments in Seoul last month was 767.89 million KRW. This is an increase of 141.92 million KRW (22.7%) compared to 625.97 million KRW in March last year. This increase is double the 72.46 million KRW rise in apartment prices of this size range over the previous year and represents the largest increase in the past five years. The average price of small apartments in Seoul (based on March each year) during this period was △338.69 million KRW in 2016 △377.09 million KRW in 2017 △447.90 million KRW in 2018 △553.50 million KRW in 2019 △625.97 million KRW in 2020, and except for this year, it had never risen by more than 100 million KRW in one year.

The price increase was steep not only in the Gangnam area and city center but also in the outskirts such as ‘No-Do-Gang’ (Nowon, Dobong, Gangbuk districts). A 50.14㎡ unit in Miseong Apartment in Wolgye-dong, Nowon-gu, was sold last month for 795 million KRW, setting a new record. The sale price of this complex in March last year was in the low 600 million KRW range. This means it rose by about 200 million KRW in one year. In Dobong-gu, a 59.88㎡ unit in Ssangyong Apartment in Chang-dong changed hands last month for 790 million KRW, up 180 million KRW from 610 million KRW a year earlier. In Gangbuk-gu, a 49㎡ unit in Jungang 1 Complex in Beon-dong set a new record last month at 600 million KRW, rising 140 million KRW from 460 million KRW in March last year.

Yoon Ji-hae, senior researcher at Real Estate 114, said, "The increase in supply of newly built small apartments for households of three or fewer people has driven up sale prices recently," adding, "Since the government's real estate regulations have focused on high-priced medium- and large-sized apartments, the demand for relatively affordable small apartments seems to have increased as well."