"Tighter Lending Pushes Buyers to Smaller Units"... For the First Time, Applications for Small Apartments Surpass Mid-sized Units

[Financial News] In the presale market for apartments in the Seoul metropolitan area, the number of applicants for small units has, for the first time, surpassed those for mid-sized units.
According to Real Estate R114 on the 10th, among 485,271 people who applied for apartment presales in the Seoul metropolitan area in 2025, 218,047 applied for small units with an exclusive area of 60 square meters or less. This exceeded the 217,322 applicants for mid-sized units of 60 to 85 square meters. Only 49,902 people applied for large units over 85 square meters. This is the first time such a pattern has appeared since the Cheongyak Home housing subscription platform was launched in 2020.
In 2025, 59.7% of all apartment applicants in Seoul, or 177,840 people, applied for small units. The competition rate for small apartments in Seoul reached 172.8 to 1, the highest in the Seoul metropolitan area. Gyeonggi Province recorded a rate of 7.5 to 1, and Incheon posted 3.0 to 1. About 40.8% of Seoul’s presale supply was concentrated in the Gangnam 3 Districts (Gangnam-gu, Seocho-gu, and Songpa-gu), and prices there were about 1.4 times the average presale price in Seoul, even under the pre-sale price cap system. As high interest rates and stricter lending rules increased the burden of raising funds, subscription demand shifted toward smaller units, which are relatively less expensive.
Traditionally, 84-square-meter apartments have been considered suitable for a family of four and are often called the "national standard size." Recently, however, the number of one- and two-person households in the Seoul metropolitan area has grown, and design advances in new apartment complexes have improved space efficiency in smaller units.
Jang Sun-young, a senior researcher at Real Estate R114, explained, "The growing preference for small apartments, driven by rising presale prices, demographic changes, and design innovation, shows that the demand structure in the Seoul metropolitan presale market is being reshaped."
Last year, the competition rate for small apartments in the Seoul metropolitan area was higher than the overall average, and in Seoul it reached a record high. Concentrated supply in the Gangnam 3 Districts and the application of the price ceiling system on presale units helped attract subscription demand by keeping prices relatively lower, but presale prices remain burdensome. With high interest rates and loan regulations further increasing financial pressure, more applicants are expected to flock to smaller units.



ming@fnnews.com Jeon Min-kyung Reporter