Is a Bigger Home Really Necessary When a 59㎡ Unit Offers the Same Layout for 300 Million Won Less? 59㎡ Surpasses 84㎡ in Supply [Real Estate AtoZ]

Increasing Number of Units to Improve Project Profitability
Rising Construction Costs Drive Expansion of 59㎡ Supply
"Associations Aim to Maximize Sales for Greater Profitability"

"When it comes to general pre-sale units, we try to include as many 59㎡ units as possible. Compared to 84㎡, the construction area per unit is smaller, which means we can supply more households." (Head of the reconstruction committee for Apartment A in Geumho-dong, Seongdong-gu, Seoul)

The proportion of 59㎡ units in Seoul's subscription market has increased. This is because, compared to the so-called "national standard" 84㎡ units, the sale price of 59㎡ units is not significantly lower, but the number of units that can be supplied increases, allowing developers to maximize pre-sale profits. Analysts also point out that growing demand from actual homebuyers is positively influencing the popularity of smaller units.

According to the construction industry on April 30, all 56 general pre-sale units in the 'Acro de Seocho' project by DL E&C in Seocho-dong, Seocho-gu are 59㎡ units. In 'Define Yeonhui,' a redevelopment project in Yeonhui 1 District, Seodaemun-gu and the first Seoul pre-sale of this year, more than half of the units are also small-sized. Out of 332 general pre-sale units, 172—or 51.8%—are 59㎡ units. In comparison, there were 112 84㎡ units released for general pre-sale. The competition ratio for 59㎡ units was 57:1, higher than the overall average of 44.1:1.

The primary reason reconstruction associations and others are increasing the supply of small apartment units for general pre-sale is profitability. By supplying more smaller units, they can secure a greater number of households. This strategy also takes into account the ongoing trend of a declining number of people per household in society.

The growing burden of construction costs is another reason for the preference toward smaller units. Until 2023, the average construction cost for redevelopment projects in Seoul was 6.73 million won per 3.3㎡. In 2024, this figure rose to 8.43 million won, and last year, it climbed to 8.9 million won. Higher interest rates and rising raw material costs have pushed up construction expenses, which inevitably increases the financial burden on association members.

The renewed interest in 59㎡ units becomes clearer when looking at the subscription market before construction costs surged. For example, in 2023, 'The Sharp Gangdong Central City' in Cheonho-dong, Gangdong-gu offered 168 general pre-sale units, among which only 66 units (39.3%) were 59㎡. In the same year, 'Sangdo Prugio Clavenue' in Sangdo-dong, Dongjak-gu, had 771 general pre-sale units, of which 261 units (33.9%) were 59㎡. In contrast, the 74㎡ and 84㎡ units totaled 510 units (66.1%), a much larger share.

Actual homebuyer demand is also driving up the supply of 59㎡ units. The sale price for 59㎡ units is typically 200 million to 300 million won lower than that of 84㎡ units, making them a viable option for those struggling to secure financing due to loan regulations.

An industry official noted, "With household sizes shrinking, there is less need for larger units. Both 59㎡ and 84㎡ units offer the same layout of three bedrooms and two bathrooms. As a result, the national standard is shifting from 84㎡ to 59㎡."

Nam Hyukwoo, a researcher at Woori Bank's Real Estate Research Institute, explained, "As the price of homes in desirable locations continues to rise due to increasing construction costs, buyers are inevitably drawn to smaller units. Most associations are diversifying their offerings to focus on small-sized units, maximizing the number of units available for pre-sale and ultimately pursuing higher profitability."