As regulations focus on apartments, the officetel market is heating up, drawing attention to the Incheon area. With relatively fewer restrictions on officetels, buying demand is pouring in, making them popular not only in sales but also in the subscription market.
Last year, the number of officetel applicants nationwide increased about fourfold compared to the previous year (2019). According to an analysis of data from the Korea Real Estate Board's subscription home by the industry, in 2019, there were 70 officetel supply sites nationwide with 33,635 units, attracting 268,250 subscription accounts. In contrast, last year, although the supply decreased to 56 sites with 27,138 units, a total of 363,982 subscription accounts were attracted, about 3.8 times more than the previous year.
Following the increase in transaction volume, both sales prices and jeonse (long-term deposit lease) prices have risen. According to data from the Korea Real Estate Board, last year’s officetel transaction volume totaled 161,642 cases, an increase of about 7.85% compared to 149,878 cases in the same period of 2019. As of the first quarter of this year (March 15), sales prices rose 0.23% compared to the previous quarter (December 14, 2020), while jeonse prices increased by 0.57%, and monthly rent prices rose by 0.26%.
In particular, the upward trend of officetels in Incheon stands out. According to data from the Korea Real Estate Board, the average sales price of officetels in Incheon Metropolitan City rose 42.95% over the past year (March 2020 to March 2021). This figure exceeds three times the average apartment sales price increase of 14.04% during the same period.
The industry attributes this to the high-intensity regulations focused on apartments, leading demand to relatively less regulated officetels. Officetel pre-sale rights are not counted as housing when calculating acquisition tax and capital gains tax, and the capital gains tax rate on pre-sale rights applies the basic rate if held for more than two years, which also acts as an advantage. Additionally, since apartments can no longer be registered as housing rental businesses, many investors are turning to officetel rental businesses to receive tax benefits.
Especially in Incheon, officetel pre-sale prices are relatively affordable compared to Seoul, but rental demand is abundant, allowing for expectations of stable rental yields, which has led to high popularity.
Amid this, a new officetel is being supplied in a prime location in Bupyeong-gu, Incheon, attracting attention. DL Construction Co., Ltd. and Daelim Corporation are currently selling ‘e-Pyeonhansesang City Bupyeong Station’ in the Bupyeong-gu area of Incheon. This complex consists of three buildings from six basement floors to 20 above-ground floors, with 1,208 officetel units ranging from 23 to 41㎡ in exclusive area, 156 office units on the 2nd and 3rd floors, and 18 neighborhood living facilities on the 1st floor. It is the largest branded officetel in Bupyeong and includes section offices, currently being sold successfully.
This complex is a triple station area within walking distance of Bupyeong Station, which is a transfer station for Seoul Subway Line 1, Incheon Metro Line 1, and the planned GTX-B line. Located near the large commercial district around Bupyeong Station, residents can conveniently access shopping and convenience facilities such as Lotte Mart, Bupyeong Station underground shopping mall, 2001 Outlet, and Moda Department Store.
The officetel units come fully furnished with washing machines, refrigerators, and system air conditioners. Even the small-sized units with an exclusive area of 23㎡ provide ample storage space with built-in closets including a retractable laundry drying rack. The complex applies cutting-edge IoT and solar power systems for a convenient living environment and energy savings, and also features a fitness center for healthy leisure activities within the complex.
For the offices, section offices provide exclusive balcony service areas to maximize workspace utilization. Basic amenities include heating and cooling systems, ventilation systems (heat exchange), and digital door locks for a comfortable working environment. Additionally, car-sharing services using a shared vehicle system in the parking lot will be provided, along with rental management services that handle vacancy and complaints on behalf of landlords, and concierge services that process residents’ requests through an agency.
Furthermore, since it is not subject to regulations, pre-sale rights can be resold, and benefits such as a 10% down payment and full interest-free installment payments are offered.
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