Money Flocks to Gangnam Apartments... 'Retiree's Dream of Being a Building Owner' Also Broken [Real Estate A to Z]

#. A representative of a building brokerage firm, A, recently received strong complaints from a client. This was because they had advised a wealthy individual considering an apartment to purchase a small building worth 6 billion won. Representative A said, "The client was angry because the price of the high-end apartment they intended to buy had skyrocketed," and added, "This is the first time I've experienced something like this."



On the 27th, Financial News analyzed and compared transactions of apartments (over 5 billion won) and small buildings (under 10 billion won) in the Seoul area, and found that the saying 'Above the creator is the building owner' is becoming outdated. This is because the main investment destination for wealthy individuals is shifting from small buildings to high-priced Gangnam apartments.

For the Seoul area, apartment transactions over 5 billion won were analyzed using data from the Ministry of Land, Infrastructure and Transport, while transactions of small buildings under 10 billion won (with a total floor area of less than 10,000㎡) were analyzed by the building consulting firm Realty Korea. Small to medium-sized buildings under 10 billion won are the most popular products.

According to the analysis, the number of small building transactions exceeded 1,000 from 2020 to 2022 based on the first quarter. In contrast, apartment transactions over 5 billion won were only 6 in 2020, 47 in 2021, and 32 in 2022. In short, small buildings were overwhelmingly chosen by wealthy individuals.

Park Won-gap, a senior real estate expert at KB Kookmin Bank, said, "Small buildings were a dream for retirees and a typical investment destination for the wealthy's surplus money," but added, "Recently, this trend is changing."

In fact, starting from 2023, transactions of small buildings under 10 billion won have sharply decreased, while transactions of apartments over 5 billion won have surged. According to statistics, apartment transactions over 5 billion won in Seoul were 21 in 2023, 50 in 2024, and have skyrocketed to 232 this year. This is more than a fourfold increase in just one year. In contrast, transactions of small buildings under 10 billion won fell from 320 to 504 and 527 during this period, barely reaching half of the previous level (over 100 transactions).

Data indicating a change in the preferred real estate of wealthy individuals is also emerging from other sources. KB Management Research Institute conducts an annual survey on preferred real estate among wealthy individuals. According to the recently published '2025 KB Real Estate Report,' 64% of high-net-worth individuals chose apartments as their investment destination last year.

The percentage choosing offices or commercial buildings was only 28%. Looking at the trend since 2020, the percentage of choosing apartments exceeded 60%, and the proportion of offices and commercial buildings fell below 30% for the first time.

Experts analyze that the decrease in the popularity of small buildings is partly due to the increase in vacancies due to high interest rates and economic recession, which has reduced the attractiveness of investment. Above all, it is analyzed as a phenomenon caused by the 'Gangnam apartment polarization.' High-priced Gangnam apartments are comparable to the price of most small buildings.


ljb@fnnews.com Lee Jong-bae Reporter