[2021 Apartment Brand Awards] The Difference in Brands Separates Housing Prices

Overvalued Despite Infrastructure Inconveniences

The area around Eunma Apartment in Daechi-dong, Gangnam-gu, Seoul. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Jo Gang-wook] In each regional housing market, there are complexes known as the market leaders. Despite having similar locations, these complexes not only have higher prices than nearby complexes but also form a strong demand base. Although various factors influence apartment prices, when complexes with similar or even relatively inconvenient living infrastructures such as transportation, commercial areas, and education have higher prices, it is often the apartment brand that plays a significant role. The difference in apartment brands has become an important factor in creating 'luxury apartments.'

In particular, brand apartments from large construction companies tend to have higher recognition and are more likely to become landmarks. Another reason for the preference for branded apartments is that after completion, tenant management is systematically conducted to match the brand image. According to the Korea Real Estate Board's subscription home data, among the 25,838 apartments sold in Seoul last year, the top 10 large construction companies accounted for 86.6% (22,451 units).

The popularity of branded apartments is the same in the sales markets of small and medium-sized cities outside the metropolitan area. According to Real Estate 114 data, from January to April this year, 17 complexes with 7,797 units (excluding special supply) were sold by the top 10 construction company brands outside the metropolitan area. These attracted 166,887 first-priority subscription accounts, showing an average competition rate of 21.4 to 1. In contrast, during the same period, non-branded complexes in the same regions totaled 61 complexes with 21,507 units (excluding special supply), attracting 179,113 first-priority subscription accounts, resulting in an average competition rate of 8.33 to 1. The first-priority subscription competition rate for branded complexes is nearly three times higher.

Experts expect the popularity of large branded complexes to become even more pronounced this year. As the prolonged atmosphere of the COVID-19 virus since last year has caused economic instability, the preference for a 'smart single home' has become more prominent, leading buyers to seek more stable and reliable branded products.

Construction companies are also striving to enhance the value of their 'brands.' Including DL E&C's 'e-Pyeonhansesang,' which was selected as the comprehensive grand prize winner, companies chosen for this year's Asia Economy Apartment Brand Awards are recognized in the market for their product value through differentiated brand strategies. By category, △ High-end Design: Hyundai Construction's 'Hillstate,' Lotte Construction's 'Lotte Castle' △ Remodeling: Ssangyong Construction's 'The Platinum' △ Power Brand: GS Construction's 'Xi,' Hanwha Construction's 'Forena,' Shindongah Construction's 'Familier' were selected. Additionally, △ Smart Home: HDC Hyundai Development Company's 'iPark' △ Complex Residential: POSCO Construction's 'The Sharp,' Daewoo Construction's 'Prugio,' SK Ecoplant's 'SK View,' Hanshin Engineering & Construction's 'The Hue' were respectively chosen.