Demand for apartment subscriptions in the Seoul metropolitan area during the first half of this year was concentrated on small and mid-sized homes with an exclusive floor area of 85 square meters or less. Despite an increase in supply, first-priority applicants for small and mid-sized homes rose more than 40% from a year earlier, while homes larger than 85㎡ saw both applicants and competition ratios decline even as their supply expanded.
According to an analysis of Korea Real Estate Board's subscription data by real estate research firm Real Today on the 28th, first-priority subscription applicants for homes of 85㎡ or less in the Seoul metropolitan area totaled 167,218 in the first half of this year. That represents a 42.8% increase compared with 117,108 during the same period last year.
General supply of homes 85㎡ or less also rose 46.4%, from 12,218 units in the first half of last year to 17,888 units this year. Although supply increased by more than 5,600 units, subscription applications rose in tandem, resulting in an average competition ratio of about 9-to-1.
Mid-to-large home types showed the opposite trend. First-priority applicants for homes larger than 85㎡ in the Seoul metropolitan area fell 29.6%, from 37,254 in the first half of last year to 26,232 this year.
Over the same period, general supply expanded roughly 2.5-fold, from 1,675 units to 4,190 units. As demand declined despite the increase in supply, the average subscription competition ratio fell from 22-to-1 to 6-to-1.
Combining first-priority applicants for homes 85㎡ or less and those larger than 85㎡ in the Seoul metropolitan area during the first half of this year yields 193,450 people. Of this total, applicants for homes 85㎡ or less accounted for 86.4%, up 10.5 percentage points from 75.9% in the first half of last year.
The trend is interpreted as reflecting rising demand for relatively affordable small and mid-sized homes amid the growing burden of housing prices and loan interest. Analysts also point to the decline in household size, along with improvements in storage space and spatial efficiency in small and mid-sized floor plans.
Builders are also targeting such demand by supplying a series of complexes in the Seoul metropolitan area with a high proportion of homes 85㎡ or less. Daewoo Engineering & Construction plans to sell "Geomam Station Prugio Pravenue" in Block B-1 of the Incheon Geomam Station area public housing district in August. Supplied through a private-participation public sale model, the complex consists of three buildings ranging from two basement floors to 25 above-ground floors, comprising 441 units of 60 to 84㎡. It marks the company's first complex of this type this year, following private-participation public sales carried out in Wangsuk, Hanam Gyosan and Dongtan.
Lotte E&C plans to supply "Sangdong Station Lotte Castle Signature" in the Sangdong area of Wonmi-gu, Bucheon, Gyeonggi Province, during the same month. Built as seven buildings ranging from eight basement floors to a maximum of 49 above-ground floors, the complex will total 1,859 units of 84 to 192㎡. About 74% of all units, or 1,370 units, will consist of 84㎡ homes. The complex has a station-area location near Sangdong Station on Subway Line 7. It is also adjacent to Sangdong Lake Park and Bucheon Central Park, and a large discount store is being promoted for the complex. Interest is expected from buyers who have been waiting for new apartments in the Sangdong and Jungdong living zones.
"With the sustained high-interest-rate trend, the decline in household size centered on one- and two-person households, and the increased burden of housing prices from rising raw material costs all working together, subscription demand is concentrating on homes 85㎡ or less," a Real Today official said. "Apartments 85㎡ or less have relatively low entry barriers, and their spatial efficiency has improved through the latest floor plan design technology, making them the choice of value-conscious subscribers."
