The Brilliant Revival of 'Ddolddolhan Hanche' in Medium to Large Sizes

Increase in Remote Work and Online Classes
Growing Interest in Spacious Indoor Areas
Surge in Popularity of Apartments Over 85㎡
Seoul First-Priority Subscription Competition Rate 199 to 1
5.2 Times Higher Than Last Year

[Image source=Yonhap News]

[Asia Economy Reporter Onyu Lim] The popularity of apartments with exclusive areas exceeding 85㎡ is rising in the subscription market. While the supply volume is sharply decreasing, demand for a 'smart single property' is rapidly increasing due to various government regulations. This year, in particular, interest in spacious indoor areas has grown due to the generalization of remote work and online classes caused by the spread of the novel coronavirus disease (COVID-19).

According to Real Estate 114 on the 14th, the average competition rate for first-priority subscriptions for medium-to-large apartments in Seoul this year was 199.6 to 1. This is 5.2 times higher than last year's 38.4 to 1. Even in 2014, the first-priority subscription competition rate for medium-to-large apartments in Seoul was only 2.8 to 1. In six years, the popularity of medium-to-large apartments has increased more than 71 times.

This trend is not limited to Seoul and the metropolitan area. The nationwide first-priority subscription rate for medium-to-large apartments was 64.0 to 1, more than double last year's 30.6 to 1. In particular, the first-priority subscription competition rates for medium-to-large apartments in Sejong and Gyeonggi were 153.3 to 1 and 116.2 to 1, respectively, reaching triple digits. For example, the highest competition rate for the Sejong Hanlim Pool Ever in Goun-dong, Sejong City, which was offered last month, was 343.0 to 1 for 136㎡. This was more than twice the average competition rate of 153.3 to 1. On the same day, 'Gamil Prugio Markver' supplied in Gamil District, Hanam, Gyeonggi, recorded the highest competition rate of 576.5 to 1 for 114㎡A.

Medium-to-large apartments were once neglected after the 2008 global financial crisis. As the housing market recession continued, medium-to-large apartments, which are expensive and have high maintenance costs, were shunned by consumers. The rapid increase in the proportion of one- to two-person households also contributed to the decline in popularity. However, this atmosphere has changed in recent years.

The surge in popularity of medium-to-large apartments is primarily due to increased scarcity caused by a sharp decline in supply. Nationwide supply of medium-to-large apartments exceeded 30,000 units from 2014 to 2016 but fell to 19,000 units in 2018, and barely surpassed 20,000 units this year. In Seoul, where competition is fiercest, the supply of medium-to-large apartments decreased from 4,317 units in 2014 to 3,290 units as of the 11th of this year.

Additionally, the strengthening of various real estate regulations such as the June 17 and July 10 measures has increased preference for a smart single property, which has influenced the popularity of medium-to-large apartments. Furthermore, many prospective subscribers lacking sufficient points flocked to medium-to-large apartments, where some units are allocated by lottery, which is also analyzed as a cause of the sharp rise in competition rates. Currently, for private housing over 85㎡ in speculative overheated districts, 50% of the supply is allocated by lottery, and in regulated areas, 75% is allocated by lottery.

The demand for spacious interiors has greatly increased due to the spread of COVID-19. With social distancing, remote work and online classes have become frequent, expanding the function of homes from rest to work, study, and leisure. According to Statistics Korea, as of August, 503,000 workers were working remotely or telecommuting. Compared to 95,000 a year earlier, this represents an increase of about 430%.

A real estate industry official said, "Even after COVID-19 subsides, hybrid remote work that flexibly uses both home and office will increase," adding, "As preference for a smart single property grows due to various regulations on multi-homeowners, the popularity of medium-to-large apartments in the subscription and sales markets will further increase."

This content was produced with the assistance of AI translation services.