The Smaller, The Hotter?... Subscription Rush for Small Units Over Mid-Sized in the Seoul Metropolitan Area [Real Estate A to Z]

For the first time since 2020, small-unit applicants outnumber mid-sized
"As financial burdens grow, buyers are turning to smaller units"

A view of apartments in downtown Seoul. Yonhap News

Due to the upward trend in presale prices, small-sized units are gaining more popularity than mid-sized units in the apartment subscription market in the Seoul metropolitan area. Last year, for the first time, the number of applicants for small units even surpassed that for mid-sized units.

According to Real Estate R114 on the 14th, among a total of 485,271 apartment subscription applicants in the Seoul metropolitan area last year, 218,047 applied for small apartments with an exclusive area of 60 square meters or less. A total of 217,322 applied for mid-sized apartments with an exclusive area of 60 to 85 square meters, and 49,902 applied for large apartments with an exclusive area exceeding 85 square meters.

This is the first time since 2020, when housing subscription applications began to be processed through the Korea Real Estate Board’s Cheongyak Home system, that the number of applicants for small units has exceeded that for mid-sized units.

Last year, the subscription competition ratios for small apartments in the Seoul metropolitan area by region were 172.8 to 1 in Seoul, 7.5 to 1 in Gyeonggi Province, and 3.0 to 1 in Incheon. In particular, in Seoul, 59.7% of all applicants (177,840 people) applied for small-sized units, driving the competition ratio to an all-time high.

Real Estate R114 analyzed, "As the continuous upward trend in presale prices increases the financial burden on buyers, they are turning their attention to relatively lower-priced small apartments."

In addition, in the Seoul metropolitan area, the share of one- to two-person households has been increasing rapidly in recent years. At the same time, newly built apartments are being supplied with various specialized spaces made possible by more advanced design technologies, allowing for efficient use of space even in smaller units.

Real Estate R114 assessed, "In the process of securing a home in the Seoul metropolitan area, the economic burden caused by soaring presale prices, combined with changes in the urban population structure and more sophisticated designs for small-unit layouts, suggests that the preference for small apartments seen in last year’s presale market goes beyond a short-term shift in popularity and indicates that the demand structure of the metropolitan presale market is now undergoing a full-fledged reorganization."

As attention from buyers has become more concentrated on small apartments, their price growth has also outpaced that of mid-sized units.

According to the Korea Real Estate Board’s apartment price index by size, in Seoul last year, sale prices for small apartments with an exclusive area of 60 square meters or less rose by 5.71%, marking the highest rate of increase.

This was followed by units with an exclusive area exceeding 135 square meters, which rose 5.59%, and those with an exclusive area over 85 square meters and up to 102 square meters, which rose 5.52%. Units with an exclusive area over 60 square meters and up to 85 square meters increased 5.36%, those over 102 square meters and up to 135 square meters rose 5.20%, and those with 40 square meters or less rose 2.60%.

In the wider Seoul metropolitan area as well, the rate of increase in sale prices for small apartments with an exclusive area of 60 square meters or less was relatively high. Last year, sale prices for small apartments in the metropolitan area rose 2.77%, a higher rate than the 2.46% increase recorded by units with an exclusive area over 60 square meters and up to 85 square meters.