[Column] The National Standard Size Shrinking to Exclusive 59㎡

The dominant trend in the real estate market is small apartments. The so-called ‘national standard size’ has shifted from 84㎡, typically featuring 3 bedrooms and 2 bathrooms, to 59㎡. The 84㎡ is suitable for a family of four, while the 59㎡ fits 1-2 person households. With the number of single-person households nationwide reaching 10 million as of March this year, and 16 million when including two-person households, it is a natural progression that the ‘national standard size’ has changed accordingly.

The increased demand for smaller units is also confirmed by statistics. According to Real Estate R114, the average competition rate for subscription in the first half of this year was 10.35 to 1 for small apartments nationwide (under 60㎡), and 5.58 to 1 for small-to-medium apartments (60~85㎡).

However, supply has not kept pace. Over the past three years, the general sale volume of apartments under 60㎡ supplied in the metropolitan area accounted for only 29.5% (77,548 households) of the total. The planned supply of apartments under 60㎡ in the metropolitan area until the end of the year is also only 4.9% of the total, amounting to 3,887 households. Due to this supply-demand imbalance, the value of small apartments continues to rise. Even complexes outside Seoul’s Gangnam area see 59㎡ units priced around 1 billion KRW.

This phenomenon is more pronounced in large cities where supply is limited. Especially with the soaring prices of raw materials and labor costs, apartment sale prices continue to climb, so the popularity of 59㎡ units is expected to persist for some time. This is also why there are calls in the market for applying design changes reflecting household segmentation in the reconstruction of aging apartments such as those in first-generation new towns. Household segmentation refers to dividing one large household into medium and small units in the design.

The government has also stepped up to address the shortage of small apartment supply. However, the approach is somewhat disappointing. The government plans to resolve the supply issue by providing tax support when purchasing newly built small non-apartment units such as villas and multi-family houses. This is interpreted as an attempt to disperse demand since preference for small apartments has increased after the rise in rental fraud cases. However, the number of buyers willing to move to non-apartment units, which carry higher risks and lower liquidity, is limited. Private supply is also focusing on expanding non-apartment units, which runs counter to consumer preferences.

The government is expected to announce additional supply measures next month, judging that the Seoul apartment purchase market is heating up and causing price fluctuations. It is anticipated that measures such as revitalizing non-apartment supply will be included again. Meanwhile, small apartments may become even scarcer and prices may rise to a level beyond the reach of ordinary citizens. If that happens, the national standard size will shrink further from 84㎡ to 59㎡ and then to even smaller apartments, and ordinary people may have to accept living in increasingly cramped spaces as their fate.

The diversity of housing types such as apartments, detached houses, and officetels is maintained to meet the varied preferences of consumers by the government and construction industry. However, more consumers prefer to live in apartments rather than non-apartment units. The government needs to consider how to attract these consumers to apartments at reasonable prices. Although officetels and others are considered substitutes for small apartments, it is not easy to feel the same utility. While it may be impossible to satisfy everyone, policies that keep pace with social changes seem necessary.

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