Terraced apartment units see resurgence, but competition is extreme
Terraced apartments and townhouses with gardens have once again emerged as hot property since their decline in popularity following the 2008 financial crisis.
In June, the price to get on the pre-sale list for a unit in a terraced building in the Raemian complex in Wirae New City, southeastern Seoul, was between 200 and 300 million won ($185,565 to $279,871).
Competition was so intense among bidders that 144 applicants were vying for just one unit.
There are only 24 terraced units at the complex, ranging in size from 99 to 129 square meters.
These apartments sit on the third floor or lower and have balconies spanning 64 square meters. The verandas are also uncovered so that residents may use the area as a garden.
“[For terraced houses], interested parties sign off on the sale at the price asked because there are only limited numbers of them,” a nearby real estate agent said.
On Oct. 1, more than 2,300 people bid in the pre-sale of 24 terraced apartment units, with competition 130 to 1.
That figure is double that of a non-terraced unit of the same size, which had 73.4 applicants per unit. The terraces at the Wirae Xi apartment complex in Wirae New City are between 20 to 40 square meters.
“These terraced units satisfy people’s desire to live in a detached house and escape from a dull apartment building,” said Kim Sin-jo, CEO of local pre-sale realtor iNEX Housing.
The popularity of terraced apartments largely comes from the public’s desire to live in a detached house.
After interest in detached houses peaked in 2008, the real estate market became flooded with them.
Townhouses were built as part of a complex, thought not many people could afford their high pre-sale prices, which were generally between 1.5 billion and 2 billion won.
Building a detached house is not realistic for most because of the difficulty in finding land at a reasonable cost.
It costs at least 1 billion won to build in a residential area. At Wirae New City, a 300-square-meter plot of land sold for 1.1 billion won.
Terraced units in a regular building are more affordable. At Wirae Xi, a 131-square-meter unit, the largest garden home at the complex, is priced at about 900 million won.
“Terraced units here can be an economic choice as they give a taste of a detached house for a cheaper price,” said Kim Bo-in, head of pre-sales at Wirae Xi.
The terraced units at Wirae Xi also mostly have good views of nearby gardens.
With the rising demand, builders are adding smaller terraced units spanning 58 to 84 square meters.
Some new buildings have terraced apartments on the middle floors rather than the lower or top floors, which was common before.
The Raemian apartment complex currently being built in Yongsan District, central Seoul, will have garden units on the 21st floor, while the Lotte Castle complex in Yongin, Gyeonggi, will have them on every floor.
BY AHN JANG-WON [firstname.lastname@example.org]