Price Gap Between 59㎡ and 84㎡ Apartments Falls Below 200 Million Won

The price gap between 59㎡ (small-to-mid-sized) and 84㎡ (large) apartments in Seoul has shrunk by nearly 30 percent over the past year, narrowing to below 200 million won. As small-to-mid-sized apartment prices have risen faster than larger units, market conditions are becoming relatively favorable for young professionals and first-time homebuyers with limited financial means.

In an apartment complex with roughly 3,500 households in Gwanak District, Seoul, asking prices for 59㎡ units stand at around 1.2 billion won, while 84㎡ units are listed from 1.25 to 1.3 billion won. Statistics show the same trend. As of September this year, the average transaction price for a 59㎡ apartment in Seoul was 1.13 billion won, compared to 1.3 billion won for an 84㎡ unit. The price gap between the two sizes stands at about 170 million won, down nearly 30 percent from a year earlier.

Behind this phenomenon lies a shift in demand among younger generations. Lending restrictions and rising housing costs have driven demand toward smaller apartments. Newlywed couples and single-person households, whose purchasing demand has surged amid lending regulations, have sought out relatively affordable apartments, pushing up prices for smaller units. Ham Young-jin, head of Woori Bank's Real Estate Research Lab, analyzed that the growing number of one- and two-person households has led to household fragmentation, while purchasing power is being constrained by lending regulations and rising interest rates.

Experts advise that those planning to stay long-term should consider upgrading to an 84㎡ unit. However, they note that anticipated further interest rate hikes and the resulting increase in interest burdens should be taken into account.