The Smaller the Complex, the Stronger the Brand Preference... 'Bucheon Aterazai' Scheduled for Sale

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The polarization between branded and non-branded apartments is intensifying in the small-scale apartment sales market with fewer than 300 households. While branded apartments record high competition rates based on their long-established recognition, non-branded complexes are struggling.

According to data from the Korea Real Estate Board's Subscription Home, among the complexes sold nationwide from January to August this year (as of the 28th), there were 54 small-scale complexes with a total of 300 households or fewer. These complexes offered 6,993 units (excluding special supply) and attracted 42,647 applicants, resulting in an average competition rate of 6.1 to 1 for the first priority subscription. Notably, eight complexes supplied by the top 10 construction companies ranked by construction capability evaluation attracted 27,798 applicants for 1,028 units (excluding special supply) in the first priority subscription, showing a competition rate of 27.04 to 1. In contrast, apartments from other construction companies recorded an average competition rate of only 2.49 to 1, showing a difference of more than 10 times.

Considering that the competition rates between branded (12.42 to 1) and non-branded (12.1 to 1) apartments nationwide, regardless of scale, showed little difference during this period, it is clear that the influence of branding is much stronger in smaller complexes.

The industry analyzes that the verified brand premium of large construction companies has a greater impact. Typically, branded apartments not only concentrate the abundant construction know-how of large construction companies but also often feature excellent product qualities with specialized floor plans and systems. Additionally, the long-accumulated positive image facilitates the spread of recognition within the region, and the abundant demand base allows for expectations of price appreciation.

Surveys also show high awareness of brands when choosing apartments. According to the ‘2023 Brand Power’ survey conducted by Dr. Apartment last year, 33.51% of respondents cited ‘brand’ as the top priority factor when purchasing an apartment in the same location, the highest proportion. The main reasons for valuing brand were ‘excellent quality and functionality (39.36%)’, followed by ‘personal living experience (17.02%)’, ‘word of mouth and favorable advertising in the neighborhood (15.96%)’, ‘regional landmark (12.77%)’, ‘construction company size (6.91%)’, and ‘higher sales price increase rate compared to surrounding market prices (6.91%)’.

A real estate expert said, “Recently, as both actual demand and investment demand have joined the apartment market, the brand premium has become a very important factor in price formation and price increases to the extent that people say the brand is the value of the apartment.”

The price elasticity of branded apartments in small-scale complexes is particularly noticeable. According to the Ministry of Land, Infrastructure and Transport’s actual transaction price data, an 84㎡ unit (20th floor) in ‘Dangsan Station Lotte Castle Prestige’ (moved in 2017, 198 households) in Yeongdeungpo-gu, Seoul, was traded for 1.48 billion KRW in July. This is about 105 million KRW higher than the 1.375 billion KRW transaction for the 23rd floor in July last year. In comparison, an 84㎡ unit in the nearby non-branded A complex (moved in 2015, 162 households) was traded for 1.1 billion KRW (2nd floor) in the same month, only about 40 million KRW higher than the 1.06 billion KRW (2nd floor) transaction a year earlier.

Also, in Seoksu-dong, Manan-gu, Anyang-si, Gyeonggi-do, an 84㎡ unit in ‘Hillstate Seoksu’ (moved in 2015, 239 households) was traded for 775 million KRW (7th floor) in July, rising about 52.5 million KRW compared to earlier this year. This exceeds the 30 million KRW increase of an 84㎡ unit in the nearby non-branded B complex (moved in 2011, 281 households), which was traded for 625 million KRW (3rd floor) in the same month.

Accordingly, attention is focused on branded apartments about to be newly launched. The GS Construction consortium plans to sell ‘Bucheon Aterazai’ in B2 Block of Bucheon Goean Public Housing District (Goean-dong area), Sosa-gu, Bucheon-si, in September. It will be developed as two buildings from basement level 2 to ground level 20, with a total of 200 households ranging from 50 to 59㎡ in exclusive area.

Bucheon Aterazai offers a double living zone location enjoying both Seoul and Bucheon. The complex faces the Hang-dong district of Seoul, allowing residents to enjoy various living infrastructures of both Hang-dong district and Bucheon’s original downtown. Especially, Yangji Elementary School is located directly opposite the complex, enabling safe commuting for children, and the nearby academy districts of Hang-dong and Ok-gil provide an excellent educational environment.

The pleasant residential environment is also a strength. The green arboretum, Seoul’s first public arboretum with about 200,000㎡, and Goean Sports Park are within walking distance, and nearby are Cheonwang Mountain and Cheonwang Mountain Family Camping Site.

Transportation conditions are excellent. The complex is near Yeokgok Station on Line 1, providing easy access to major business areas in Seoul such as Jongno, G-Valley (Seoul Digital Industrial Complex), Yeouido, and Gangnam. It is also adjacent to road networks such as Bugwang-ro and Sosa-dong-ro, facilitating vehicle access, and is close to major roads like Gyeongin-ro and the Metropolitan Area 1st Circular Expressway, allowing easy travel to Seoul and neighboring areas.

A promotional center is operating in Yeokgok-dong, Wonmi-gu, Bucheon-si, Gyeonggi-do, and the model house is scheduled to open in September in Sang-dong, Bucheon-si, Gyeonggi-do.

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