Smaller apartments are commanding steadily higher prices in Seoul's housing market, with 59-square-meter units narrowing their price gap with the 84-square-meter layout known as the "national standard size" in both sales and jeonse (a Korean lease system requiring a large lump-sum deposit instead of monthly rent) markets. Rising home prices and tighter mortgage rules have pushed owner-occupier buyers toward smaller homes with lower entry costs, while demand from buyers willing to accept less space to live in preferred neighborhoods has reinforced the trend.
An analysis of the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system released on the 5th found that across 69 Seoul apartment complexes where both 59-square-meter and 84-square-meter units traded in August 2021 and again in August this year, the average price gap between the two sizes narrowed to 13.0% from 22.5%, a decline of 9.5 percentage points.
The pattern is clear at individual complexes. At Raemian Wive in Dapsimni-dong, Dongdaemun District, the median sale price in August 2021 was 1.23 billion won for a 59-square-meter unit and 1.515 billion won for an 84-square-meter unit, a difference of 285 million won. By August this year, the figures stood at 1.61 billion won and 1.67 billion won, cutting the gap to 60 million won. At Ssangyong Apartments in Imun-dong, 59-square-meter units rose to 1.0715 billion won from 805 million won over the same period, while 84-square-meter units climbed to 1.075 billion won from 932.5 million won, narrowing the difference to 3.5 million won from 127.5 million won. A broker near the complex said buyers of apartments priced below 1.5 billion won often borrow up to their maximum limit, and that even a small price difference frequently puts the 84-square-meter units out of reach.
Asking prices show a similar picture. At Lotte Castle Veneluce in Godeok-dong, Gangdong District, a 59.9-square-meter unit is listed at 1.8 billion won and an 84.9-square-meter unit at 1.95 billion won, a gap of about 150 million won. A broker in Dongdaemun District said demand for smaller layouts has clearly increased recently, noting that the lowest asking price for a 114-square-meter unit at Imun-dong's Ssangyong is 1.24 billion won, only about 100 million won above the highest asking price of 1.15 billion won for a 59-square-meter unit. Buyers appear to weigh floor level and the complex's location more heavily than size, the broker said.
Smaller units have also gained ground in the jeonse market. Across 60 complexes where new jeonse contracts were signed for both layouts in August 2021 and August this year, the gap between 84-square-meter and 59-square-meter deposits narrowed to 17.0% from 26.6%, a decline of 9.6 percentage points. At Godeok Graceium in Gangdong District, median jeonse deposits in 2021 stood at 740 million won for 59-square-meter units and 1.1 billion won for 84-square-meter units, a difference of 360 million won. This year the figures were 820 million won and 925 million won, cutting the gap to 105 million won. At Shindorim Taeyoung Town, the gap between the two layouts narrowed to 19.0% from 53.8%.
Higher housing costs and financial regulations are seen as driving the strength in 59-square-meter units. Mortgage limits shrink as home prices rise, and tighter stress debt service ratio (DSR) rules have increased the equity burden on relatively expensive 84-square-meter units. Demand has also deepened among buyers who prefer a 59-square-meter unit in an area with good access to jobs, transit and schools over a larger home on the city's outskirts for the same budget. The growing number of one- and two-person households and improved floor plans for 59-square-meter units are also cited as factors lifting prices for smaller layouts.
