Small Apartments Are Popular... But 'Mid-Low Price' Under 600 Million Won Is Scarce [Practical Financial Technology]

H1: First Half of the Year Seoul Small Apartment Transactions Under 600 Million KRW
Drop to Record Low Levels

Increase in 1-2 Person Households, Rising Jeonse Prices, and Sale Prices Lead to Disappearance of Listings

Available Mainly in No, Do, Gang and Geum, Gwan, Gu Districts

Seoul City approved the architectural plan for the reconstruction project of Sanggye Jugong Complex 5 at the 15th Architecture Committee meeting. The photo shows Sanggye Jugong Complex 5 in Nowon-gu, Seoul, on the 31st. Photo by Jin-Hyung Kang aymsdream@

As more people look for small apartments in the Seoul real estate market, mid- to low-priced listings are becoming scarce. In particular, the proportion of apartment sales under 600 million KRW in the first half of this year dropped to the lowest level ever recorded. Due to the increase in 1- to 2-person households and the rise in jeonse prices and pre-sale prices, it is becoming increasingly difficult to find mid- to low-priced small apartments in the real estate market.

According to an analysis by KB Real Estate of the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system on the 7th, the total number of small apartment sales (exclusive area of 60㎡ or less) in Seoul in the first half of this year (January to June) was 11,279. Among these, transactions under 600 million KRW accounted for 34% (3,837 cases). This is the lowest proportion since the Ministry of Land, Infrastructure and Transport began compiling related statistics in 2011.

The proportion of transactions under 600 million KRW among small apartments in Seoul accounted for more than 90% from 2011 to 2016. However, in 2021, when housing prices rose, it decreased to an average of 45.4%. After housing prices fell in 2022, it rose again to an average of 66%, but since last year, it has been falling for two consecutive years.

A KB Real Estate official said, "Currently, the average jeonse price of apartments in Seoul has exceeded 600 million KRW," adding, "Many people prefer to buy mid- to low-priced small apartments at a similar price rather than paying 600 million KRW for jeonse, making it increasingly difficult to find listings in the market." According to KB Real Estate, the average jeonse price of apartments in Seoul surpassed the 600 million KRW mark in May (600.58 million KRW) and rose to 610.27 million KRW last month.

The rise in pre-sale prices has also contributed to the supply shortage. The official said, "Apartment pre-sale prices have soared, so even for small apartments, it is now impossible to find ones under 600 million KRW within Seoul city," adding, "Most jeonse listings under 600 million KRW now are for older buildings." Additionally, the increase in 1- to 2-person households has been a major cause of the shortage of listings due to increased demand.

So where should one look for small apartments under 600 million KRW in this situation? Among Seoul's 25 autonomous districts, Dobong-gu was found to have the highest proportion of small apartment transactions under 600 million KRW. In the first half of this year, Dobong-gu recorded a total of 324 transactions for apartments with an exclusive area of 60㎡ or less. Among these, 87.3% (283 cases) were under 600 million KRW. Following Dobong-gu were Nowon-gu (79.2%), Gangbuk-gu (76.8%), Jungnang-gu (74.7%), Geumcheon-gu (63.1%), and Guro-gu (62.4%).

Within Dobong-gu, representative mid- to low-priced small apartment listings can be found at "Raemian Dobong" in Dobong-dong. Apartments with an exclusive area of 59㎡ are priced in the 500 million KRW range. A unit on the 5th floor was sold on June 13 for 585 million KRW. The KB market price (as of the 19th of last month) is 585 million KRW. It is close to Dobong Station on Line 1.

In Nowon-gu, Sangye Jugong Complex 10 is notable. You can purchase a 58㎡ unit for under 600 million KRW. The apartment, built 37 years ago, is currently undergoing a reconstruction project. On the 12th of last month, a 9th-floor unit was sold for 595 million KRW. The KB market price is 600 million KRW. In Jungnang-gu, the representative small apartment under 600 million KRW is the Sinnae 6 Complex Shiyeong Apartment in Sinnae-dong (actual transaction price for a 59㎡ unit in June was 585 million KRW), and in Geumcheon-gu, Geumcheon Hyundai in Doksan-dong (actual transaction price for a 59㎡ unit last month was 569 million KRW) is notable.

A KB Real Estate official said, "Even though the real estate market has recently slowed down, due to the high apartment prices in Seoul, it is expected to become increasingly difficult to find mid- to low-priced apartment complexes under 600 million KRW, even for small units," adding, "Nevertheless, if you carefully search in areas with a relatively high proportion of low-priced apartments, it is still possible to secure a home in complexes near subway stations."