Seoul Small Apartment Sales Surge: Multi-Homeowners Lead the Trend
Seoul’s real estate market is seeing a notable shift, with smaller apartments increasingly dominating both sales and buyer interest. Recent data indicates a growing preference for units 60 square meters or less, a trend fueled by demographic changes and evolving financial conditions.
Small Apartments Gain Traction in Seoul
According to an analysis of data from the Ministry of Land, Infrastructure and Transport’s real estate transaction system, apartments 60 square meters or less accounted for 42.8% of all Seoul apartment transactions last month. This marks an increase from 39.9% in October of last year and a further rise from 44.8% in December.
The sustained demand for smaller apartments is linked to changing family sizes. However, the implementation of stricter lending regulations in October of last year, known as the 10·15 measures, has accelerated this trend. These measures limited housing loan amounts to 600 million won for apartments priced under 1.5 billion won, 400 million won for those between 1.5 and 2.5 billion won, and 200 million won for properties exceeding 2.5 billion won.
Strong Demand in the Housing Lottery
This preference for smaller units is also evident in the housing lottery system. Data from 부동산R114 shows that of the 485,271 applicants for apartments in the greater Seoul area last year, approximately 45%, or 218,047 people, applied for units 60 square meters or less. This was the first year since 2020, when the Korea Housing and Land Corporation’s online application system was launched, that the number of applicants for smaller apartments exceeded those for larger ones. In Seoul specifically, 59.7% (177,840 people) of all applicants sought smaller units, resulting in record-high competition rates.
The popularity of smaller units was also demonstrated in the first apartment offering of the year, ‘D-Pine Yeonhee’ in the Seodaemun district. The 59 square meter A-type unit saw a competition rate of 66.2 to 1, surpassing the 55.6 to 1 rate for the 84 square meter A-type unit.
The proportion of small apartment transactions in Seoul could continue to rise due to the deferral of capital gains taxes for multi-homeowners. To avoid these taxes, owners must sell their properties before May 9th, and smaller, more in-demand apartments are likely to be the first to be listed. While transaction reporting has a 30-day window after a sale, preliminary data for the first 19 days of this month indicates a 2.5 percentage point increase to 45.3% compared to the previous month.
What Might Happen Next
NH Nonghyup Bank’s real estate specialist, Yoon Su-min, noted that the lending restrictions are prompting multi-homeowners to prioritize the sale of smaller, easily tradable properties with limited price declines. This is also influenced by a preference for owning a single, high-quality property.
Frequently Asked Questions
What percentage of Seoul apartment transactions were for units 60 square meters or less last month?
42.8% of all Seoul apartment transactions last month were for units 60 square meters or less.
What changes to lending regulations may have contributed to the increase in small apartment transactions?
The 10·15 measures implemented last year limited housing loan amounts based on property price, potentially increasing demand for smaller, more affordable units.
What percentage of applicants in the greater Seoul area applied for apartments 60 square meters or less last year?
Approximately 45%, or 218,047 applicants, applied for apartments 60 square meters or less in the greater Seoul area last year.
As Seoul’s housing market continues to evolve, will the trend towards smaller apartments persist, and what impact will this have on overall property values?