The Highest Ever Proportion of Micro-Apartment Purchases... Impact of Increasing Single-Person Households and Interest Rate Hikes

[Asia Economy Reporter Hwang Seoyul] From January to September this year, the proportion of micro-apartment sales transactions nationwide reached an all-time high. This phenomenon is analyzed to have occurred due to the relatively low prices available during the interest rate hike period and the increase in single-person households.

According to real estate information provider Economy Man Lab's review on the 23rd of apartment sales volume by size from the Korea Real Estate Agency, out of 243,514 apartment sales transactions nationwide from January to September this year, 27,192 transactions involved micro-apartments with exclusive areas of 40㎡ or less, accounting for 11.2% of the total. This is the first time since the Korea Real Estate Agency began compiling related statistics in 2006 (based on January to September) that the purchase proportion of apartments with exclusive areas of 40㎡ or less nationwide reached double digits.

The region with the highest purchase proportion of apartments with exclusive areas of 40㎡ or less was Seoul. During the same period, out of 12,722 apartment sales transactions in Seoul, 3,036 involved apartments of 40㎡ or less, accounting for 23.9% of the total, marking the highest proportion since 2006.

The next highest regions were Sejong (21.5%), Chungnam 20.6%, Daejeon 18.7%, Jeju 15.3%, Chungbuk 14.7%, Incheon 13.6%, Gangwon 12.7%, Gyeonggi 10.9%, Gwangju 10.1%, Jeonnam 9.6%, Jeonbuk 8.8%, Busan 7.6%, Daegu 7.2%, Gyeongbuk 6.5%, Gyeongnam 3.8%, and Ulsan 3.4%, in that order.

Among the 25 autonomous districts of Seoul, the highest proportion of micro-apartment purchases was in Jongno-gu and Jungnang-gu. From January to September this year, the proportion of apartment sales transactions involving apartments with exclusive areas of 40㎡ or less out of total apartment sales in Jongno-gu and Jungnang-gu was 41.1%. Following were Dongjak-gu 39.9%, Dongdaemun-gu 35.5%, Yeongdeungpo-gu 34.2%, Geumcheon-gu 31.9%, Guro-gu 31.8%, Jung-gu 31.4%, and Gangdong-gu 30.2%, in descending order.

Hwang Hansol, a research fellow at Economy Man Lab, said, “The sharp increase in single-person households and the relatively lower burden of micro-apartments amid interest rate hikes seem to have attracted attention, increasing the purchase proportion.”

Meanwhile, the number of single-person households nationwide was 5,203,440 in 2015, accounting for about 27.2% of the total, but increased to 7,165,788 last year, raising the proportion to 33.4%.