Popularity Surge of Medium to Large Officetels

Residential Units Over 85㎡ in Seoul Increase by 0.28%

Officetel Dense Area Near Gwanghwamun

The price increase of apartments and the government's loan and subscription regulations have led to a noticeable rise in prices of officetels over 85㎡ (exclusive area) in the Seoul metropolitan area. This is interpreted as real demand and investors flocking to large officetels as alternative products to housing.

According to the Korea Real Estate Board on the 25th, the sales price index change rate for residential officetels over 85㎡ in the Seoul area recorded 0.28% in December last year. Following that, those between 60~85㎡ rose by 0.17%, and those between 40㎡~60㎡ increased by 0.05%. The larger the officetel, the greater the price increase. On the other hand, small officetels under 40㎡ actually fell by 0.01% during the same period.

This trend is similar in the Gyeonggi area as well. Officetels under 40㎡ rose by 0.02% during this period, while △40~60㎡ increased by 0.27%, △60~85㎡ by 0.41%, and △over 85㎡ by 0.32%. Demand was higher for medium to large officetels suitable for 3 to 4-person families than for small officetels for 1 to 2 persons.

The rise in prices of medium to large officetels is analyzed to be related to the balloon effect of government regulations. Unlike houses, officetels can be subscribed to by anyone aged 19 or older regardless of subscription savings accounts or home ownership. Mortgage loans (LTV) can also be obtained up to 70% of the sale price.

The popularity of officetels is also soaring in the sales market. The Pangyo Valley Ja-i officetel by GS Construction, which received subscriptions on the 20th and 21st, had 65,503 applicants for 282 units, recording an average competition rate of 232 to 1. In particular, the 3rd complex of this officetel, which supplied 62 units, attracted 51,709 applicants, reaching a competition rate of 834 to 1.