Small apartments are driving prices in Seoul's housing market, overtaking mid- to large-sized units. With the expansion of one- and two-person households coinciding with tighter lending rules, end-users are flocking to smaller units to secure prime locations, even if it means giving up more space.
According to the apartment sales price index by size released Tuesday by the Korea Real Estate Board, units with exclusive floor space of 41 to 60 square meters rose 3.55% this year, posting the highest gain across all size categories. Units of 61 to 85 square meters (2.34%), 103 to 135 square meters (1.58%), and those under 40 square meters (1.45%) followed, while gains were relatively limited for 86 to 102 square meters (0.82%) and those over 136 square meters (0.91%).
The trend has shifted markedly from a year earlier. In the same period last year, only units under 40 square meters (-0.11%) declined, and 41 to 60 square meter units rose just 0.77%, while mid- to large-sized units led the market, including those over 136 square meters (2.23%), 86 to 102 square meters (1.90%), 103 to 135 square meters (1.51%), and 61 to 85 square meters (1.34%). Market leadership has shifted to small units in just one year.
Transaction shares are moving in the same direction. Of the 16,748 apartment transactions in Seoul in the first quarter of this year, small units of 60 square meters or less accounted for 7,368 deals, or 44% of the total. That is up 3 percentage points from 41% a year earlier, approaching half of all transactions. "The 59-square-meter type is the most sought-after by first-time homebuyers," said the head of a real estate agency in Gangseo-gu, Seoul. "It's because the size and price are suitable for newlyweds or three-person households."
Shifts in household structure and the regulatory environment are both cited as drivers. With the share of one- and two-person households in Seoul exceeding 66% in 2024, real estate measures announced on October 15 last year lowered mortgage limits by home price tier in the metropolitan area and regulated zones, raising the bar for entry into higher-priced mid- to large-sized homes. With all of Seoul designated a land transaction permit zone, the actual-residency requirement has also tightened, channeling demand toward small units that allow both owner-occupancy and manageable financing.
Small complexes priced above 100 million won per 3.3 square meters (pyeong) are also emerging one after another. According to the Ministry of Land, Infrastructure and Transport's real-transaction price disclosure system, a 40-square-meter unit at Jayang Hoban Summit in Gwangjin-gu changed hands for 1.29 billion won on the 6th of this month, becoming the first unit in the complex to cross the 100 million won per pyeong threshold.
Differences by size also emerge in the pace of recovery to previous peaks. A 59-square-meter unit at Samseon Prugio in Seongbuk-gu traded at 950 million won in February, setting a new record high, while 84- and 114-square-meter units in the same complex have yet to regain their 2021 peaks.
The per-unit price gap by size has widened further. An analysis of transactions at Helio City in Songpa-gu over the past year shows that 49-square-meter units had the highest average price at 145.85 million won per 3.3 square meters, followed by 39-square-meter units (138.79 million won) and 59-square-meter units (137.99 million won), with small units dominating the top ranks. The 84-square-meter unit stood at 108.37 million won, about 37.47 million won, or 34.58%, lower than the 49-square-meter unit. Compared with 2024, when the gap between 84-square-meter units (81.77 million won) and 49-square-meter units (104.43 million won) was about 22.67 million won, or 27.72%, the price divergence has steepened.
Experts see this as the combined result of demographic shifts and policy factors. "Along with household fragmentation centered on one- and two-person households, loan restrictions and price burdens are major factors behind the preference for small apartments," said Ham Young-jin, head of the Real Estate Research Lab at Woori Bank. "Before the loan restrictions, buyers could purchase mid- to large-sized units with a jeonse tenant in place, but now buying a small unit that allows both owner-occupancy and financing is the rational choice." Jang So-hee, real estate specialist at Shinhan Premier Pathfinder, said, "Buyers who observed the surge in housing prices in 2021, the subsequent correction, and the pace of recovery have increasingly opted for prime locations with lower downside risk and stronger resilience. As the trend of choosing superior locations even at the cost of smaller floor space has strengthened, the popularity of a 'small but smart single home' has grown."
