Small Seoul apartments rise 12.9% as demand shifts from larger units

Prices for Seoul apartments with an exclusive area of 60㎡ or less rose 12.9% between January and September, growing more than four times faster than large units. Driven by loan regulations, demanders are increasingly targeting smaller or cheaper units in outlying areas like Gangseo-gu and Nowon-gu.

The upward trend in the Seoul apartment market is rapidly shifting from the traditional focus on "national standard size" (84㎡ exclusive area) toward small apartments. As loan regulations increase the burden of self-funding, demanders are reducing their required floor space or turning their attention to relatively cheaper outlying areas.

According to an analysis of the KB Sales Price Index released by KB Real Estate TV, the prices of small apartments in Seoul with an exclusive area of 60㎡ or less rose by 12.9% from January to September this year. This figure overwhelmingly surpasses the growth rates of other sizes during the same period: medium-small (8.9%), medium-large (6.4%), medium (4.8%), and large (2.7%). The growth rate for small apartments is more than four times higher than that of large apartments. In Gyeonggi Province, small apartments also recorded the highest growth rate at 7%. Notably, the increase in small and medium-sized apartments has shown a steep upward trend since July.

Transaction Concentration in Large Complexes in Outlying Areas of Gangseo-gu, Nowon-gu, and Guro-dong

The concentrated demand is not in premium areas like Gangnam or Seocho, but in the outlying areas of Seoul where the burden of housing prices is relatively lower. Looking at the recent transaction status of 61 ultra-small apartments (40㎡ exclusive area or less), Banghwa-dong in Gangseo-gu had the highest number of transactions with 31 cases. This was followed by Gayang-dong, Guro-dong, Sanggye-dong, and Wolgye-dong in order of transaction activity.

Transactions occurred primarily around large-scale apartment complexes. In Gayang-dong, Gangseo-gu, Gangbyeon Urban Development Complex 3 saw the most sales with 16 cases, while Urban Development Corporation Green Apartments in Banghwa-dong recorded 14 cases. In Sanggye-dong, Nowon-gu, Sanggye Jugong Complex 7 absorbed local demand with 28 transactions.

The price surge is also intense. A 34㎡ unit in Gangbyeon Apartments, Gayang-dong, recently traded at 820 million won, breaking its all-time high. A 39㎡ unit in Urban Development Corporation Green Apartments, Banghwa-dong, traded at 600 million won, and a 45㎡ unit in Sanggye Jugong Complex 7 traded at 700 million won, marking the highest prices in the last year. In particular, Sanggye Jugong Complex 7 saw a 100 million won increase in just three months compared to its transaction at 600 million won this past June.

Actual Demanders Reducing Size Due to Loan Regulations... "Caution Advised Against Unconditional Chasing Purchases"

The backdrop to the surge in small apartment prices lies in the price gap and loan regulations. As of this past September, the average price for medium-sized apartments in Seoul was 2,304,120,000 won, whereas small apartments were at the level of 1,077,940,000 won, which is less than half. With the tightening of loan regulations making it difficult to secure funds, there is a clear trend of actual demanders choosing to reduce their floor space or selecting cheaper complexes in outlying areas.

However, analysis suggests that chasing purchases recklessly in a situation where prices have surged should be avoided. This is because, even for apartments of the same size, there are significant differences in price and transaction volume depending on the distance to subway stations, the scale of the complex, and surrounding amenities. Rather than rushing decisions solely because prices have recently surged or transactions are active, caution is needed to find properties that meet specific conditions by comprehensively reviewing KB market prices, actual transaction prices, and transaction volumes.

Source: original video (YouTube)