Competition Rate for 59-Square-Meter Units Nearly Double That of 84-Square-Meter Units
Rising Sale Prices and Lending Regulations Drive the Trend
Smaller Units Outperform Mid- to Large-Sized Units for Three Consecutive Quarters
Applicants hoping to apply for the preliminary subscription are receiving consultations at the subscription registration site. Photo by Asia Economy DB
As small-sized apartments gain popularity, it has been found that the subscription competition rate for 59-square-meter units?often referred to as the "national standard size"?has surpassed that of the 84-square-meter units. In particular, during the first quarter of this year, the competition rate for 59-square-meter units was about 1.8 times higher than that for the 84-square-meter units, clearly reflecting a market shift toward actual end-users.
According to an analysis by the real estate research firm RealToday of data from Korea Real Estate Board's Cheongyak Home, the average primary subscription competition rate for 59-square-meter apartments in the first quarter of this year was 23.34 to 1. During the same period, the competition rate for 84-square-meter units was 12.97 to 1, meaning the 59-square-meter units saw nearly twice the competition.
This trend has continued since the second half of last year. In the second quarter of 2023, the competition rate for 84-square-meter units (8.89 to 1) was higher than that for 59-square-meter units (2.26 to 1). However, in the third quarter, the 59-square-meter units reversed the trend with a rate of 51.16 to 1, compared to 23.16 to 1 for the 84-square-meter units. In the fourth quarter, the gap widened further, with the 59-square-meter units at 21.77 to 1 and the 84-square-meter units at 8.58 to 1. As a result, the dominance of smaller units has continued for three consecutive quarters.
At a model apartment housing complex, prospective homebuyers are receiving consultation regarding subscription applications. Photo by Asia Economy DB
The preference for small-sized apartments is analyzed as the result of a combination of factors, including sharply rising sale prices, stricter lending regulations, and changes in household composition. According to the Housing and Urban Guarantee Corporation (HUG), as of March this year, the average sale price for private apartments in the Seoul metropolitan area was 28.37 million won per 3.3 square meters, a 10.4% increase compared to the same period last year. When converted to unit size, the price gap between 59-square-meter and 84-square-meter units can reach up to 284 million won.
The financial authorities' regulation on the debt service ratio (DSR) has also contributed to the increased demand for small-sized apartments. With lending limits restricted due to the application of additional interest rates, end-users who find it difficult to afford mid- to large-sized apartments are turning to smaller units that require less financial burden.
The growing number of one- and two-person households is also accelerating the preference for smaller units. According to the Population and Housing Census released by Statistics Korea in 2023, the average household size nationwide decreased to 2.2 persons, and households with three or fewer members accounted for 83.3% of all households.
In the past, there was a strong perception that "small homes are inconvenient," but recently, small apartments are being designed with high-end features such as four-bay layouts, pantries, and dressing rooms, satisfying both practicality and user satisfaction.
A RealToday official stated, "Demand for 59-square-meter units continues to grow due to rising sale prices, improved designs for small homes, and changes in demographic structure. This trend is expected to continue for the time being, with strong interest from end-users in the supply of small-sized units."
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