Helio City apartment complex in Garak-dong, Songpa-gu, Seoul [Naver Street View]
Helio City apartment complex in Garak-dong, Songpa-gu, Seoul [Naver Street View]

Small apartments with an exclusive use area of 60 square meters or less are surging in popularity in South Korea's real estate market. As pre-sale prices for private apartments rise across the country, both subscription and purchase demand is concentrating on smaller units, which carry a comparatively lower financial barrier to entry.

According to data from Real Estate R114 released Tuesday, first-priority subscription competition rates for units of 60 square meters or less at complexes launched for pre-sale nationwide this year averaged 13.97 to 1. Over the same period, units in the 60–85 square meter range and those exceeding 85 square meters posted average rates of 3.36 to 1 and 3.4 to 1, respectively — more than four times lower than the rate for smaller units.

The dominance of small units is also evident at individual complexes. The 44-square-meter type at Acro River Sky in Daebang-dong, Dongjak-gu, Seoul recorded the highest first-priority subscription competition rate among all unit types when it went on sale in May, averaging 76.75 to 1. The 59-square-meter type at Raemian Ellavine in Banghwa-dong, Gangseo-gu, Seoul similarly topped its complex in March, averaging 228.8 to 1.

Record transaction prices are also emerging at already-occupied complexes as demand for small units grows. According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system, a 39-square-meter unit at Helio City in Garak-dong, Songpa-gu, Seoul sold for 1.98 billion won ($1.29 million) in May, setting a new record high. A unit of the same size at Olympic Park Foreon in Dunchon-dong, Gangdong-gu, Seoul also set a record in April, selling for 1.8 billion won.

Industry observers attribute the strong demand for small units to a shift driven by rising pre-sale prices. Higher raw material costs, labor expenses and financing costs have pushed up pre-sale prices, steering buyers toward smaller units where the financial burden is relatively lighter. As of late May, the average pre-sale price per pyeong (3.3 square meters) for newly launched private apartments nationwide over the past year stood at around 22.26 million won, up 17.28 percent from 18.98 million won in the same month a year earlier.

Mortgage regulations are also fueling the trend. For homes priced below 1.5 billion won, buyers can borrow up to 600 million won when converting to a balance loan; for homes between 1.5 billion won and 2.5 billion won, the cap falls to 400 million won; and for homes priced at 2.5 billion won or more, only 200 million won in loans is available.

"Small units in recent supply have seen improved space efficiency thanks to advances in floor-plan design technology, which has raised their appeal among buyers," a real estate industry official said. "With pre-sale prices continuing to climb, the popularity of small units is likely to persist for now."

Against this backdrop, newly launched complexes that include small units are drawing attention. Daewoo Engineering & Construction is currently accepting subscriptions for Jangwi Prugio Mark One in Jangwi-dong, Seongbuk-gu, Seoul. Developed through the Jangwi District 10 housing redevelopment project, the complex spans 23 buildings ranging from five below-ground to 35 above-ground floors, with a total of 1,931 units. Of these, 1,032 units ranging from 39 to 114 square meters are available for general pre-sale.

Daewoo Engineering & Construction is also accepting subscriptions for Summit The Hill in Heukseok-dong, Dongjak-gu, developed through the Heukseok District 11 housing redevelopment project. The complex comprises 30 buildings ranging from six below-ground to 16 above-ground floors, with a total of 1,515 units spanning 39 to 150 square meters. Of these, 432 units ranging from 39 to 84 square meters are available for general pre-sale.

A consortium of Hanwha's construction division and Hyundai E&C plans to launch pre-sales in August for Forena Hill State Jinju in Ihyeon-dong, Jinju, South Gyeongsang Province. Built through the Ihyeon District 1-5 reconstruction project, the complex will consist of eight buildings ranging from two below-ground to 35 above-ground floors, with a total of 1,032 units spanning 59 to 110 square meters. Of these, 398 units ranging from 59 to 84 square meters will be offered for general pre-sale, including 211 units of the 59㎡A type and 21 units of the 59㎡B type.

Xi S&D plans to launch pre-sales in August for Chungjeongno Station Xi Rene in Jungnim-dong, Jung-gu, Seoul, developed through the Mapo-ro District 5, Zones 10 and 11 urban renewal redevelopment project. The complex will offer a total of 299 units ranging from 39 to 84 square meters, of which 186 units will be available for general pre-sale.


hss@heraldcorp.com