Demand rises but supply falls short... Last year, 8 out of 10 apartment applicants chose mid-to-large units

[Asia Economy Reporter Kim Min-young] Last year, medium-to-large apartments were highly popular in the apartment pre-sale market.

According to Real Today, a real estate research firm, which analyzed the number of applicants for apartments pre-sold last year (based on the first-priority subscription application date from Korea Real Estate Board's Subscription Home), 8 out of the top 10 locations with the highest number of applicants were medium-to-large apartments with exclusive areas exceeding 85㎡.

Looking at the top 10 in order: ▲’Dongtan Station Dietre Prestige’ (102.98㎡, 107,508 applications) ▲’Dongtan Station Dietre Prestige’ (102.99㎡, 74,443 applications) ▲’Sejong Xi The City’ (101.82㎡, 70,883 applications) ▲’Tangjeong Station Yemi Ji’ (84.61㎡, 59,234 applications) ▲’Tangjeong Station Yemi Ji’ (102.45㎡, 49,506 applications) ▲’Sejong Xi The City’ (101.42㎡, 40,820 applications) ▲’Dongtan Station Dietre Prestige’ (84.98㎡, 36,265 applications) ▲’ePyeonhansesang Gangil Urban Bridge’ (101.04㎡, 30,133 applications) ▲’Sejong Xi The City’ (124.27㎡, 29,797 applications) ▲’Sejong Richensia Familier’ (90.22㎡, 27,311 applications).

The popularity of medium-to-large apartments is due to the fact that exclusive areas exceeding 85㎡ are subject to a lottery system, allowing applicants with lower scores to apply.

Currently, in the pre-sale market, small apartments with exclusive areas of 85㎡ or less are supplied 100% by the point system in speculative overheated districts, 75% by the point system in regulated areas, and 40% by the point system in non-regulated areas. In contrast, medium-to-large apartments exceeding 85㎡ are supplied 50% by lottery in speculative overheated districts, 70% by lottery in regulated areas, and 100% by lottery in non-regulated areas.

The enthusiasm for medium-to-large apartments is a nationwide phenomenon. The average first-priority competition rates by exclusive area (85㎡ or less / over 85㎡) in the metropolitan area and provinces are ▲Metropolitan area over 85㎡: 87.32 to 1 ▲Provinces over 85㎡: 40.94 to 1 ▲Metropolitan area 85㎡ or less: 22.84 to 1 ▲Provinces 85㎡ or less: 10.55 to 1, showing that demand for medium-to-large apartments was higher than for small apartments.

Although demand for medium-to-large apartments is growing, the supply volume is not keeping pace with demand, which is another reason for their increased popularity. Last year, the nationwide supply of general pre-sale units with exclusive areas over 85㎡ was 17,251 households, accounting for only 11% of the total general supply of 158,548 households.

A Real Today official said, "As subscription competition intensifies and winning scores rise, applicants with low scores are flocking to medium-to-large apartments with a higher lottery ratio," adding, "Meanwhile, medium-to-large apartments are becoming even more precious in the housing market due to their limited supply compared to demand."