Investment Demand Pours into Officetels Avoiding Various Regulations
High-Priced Sales Across the Seoul Metropolitan Area
Officetel Prices Soar Beyond Apartment Market Prices
[Asia Economy Reporter Kim Min-young] Officetel sale prices are skyrocketing. In Bundang New Town, Gyeonggi Province, and Gwacheon, the sale price of 84㎡ (exclusive area) officetels has surpassed the market prices of nearby apartments, resulting in high-priced officetels. While apartment prices are tightly controlled by the price ceiling system, the supply prices of officetels, which are free from such regulations, appear to be experiencing a balloon effect.
According to the construction industry on the 20th, the sale price of the 84㎡ officetel at ‘Hillstate Gwacheon Cheongsayeok,’ scheduled for sale as early as this month, reaches 1.5 to 1.6 billion KRW. This equates to about 60 million KRW per 3.3㎡. Considering that apartments of 59㎡ in Gwacheon Knowledge Information Town were supplied at around 500 million KRW and 84㎡ apartments at around 800 million KRW, the officetel price is nearly double. This price approaches the average apartment sale price in Gwacheon last month, which was 1.65 billion KRW.
The ‘La Porte Blanc Bundang Seohyeon’ officetel near Seohyeon Station on the Bundang subway line in Bundang New Town also has sale prices exceeding those of nearby apartments of the same size. The 84㎡ officetel is expected to be priced at 1.5 billion KRW. This is higher than the average apartment sale price in Bundang last month, which was 1.342 billion KRW. In fact, an 84.6㎡ unit in the nearby Seohyeon-dong Simbeom Woosung was sold last month for 1.47 billion KRW.
High-priced officetel sales are continuing across various parts of the Seoul metropolitan area. The 84㎡ officetels at ‘Dasan Station The Class Dongjin’ in Dasan New Town, Namyangju, and ‘Byeollae Station Ziwell Estate’ in Galmae District, Guri, scheduled for sale this month, are expected to be priced in the 700 million to 800 million KRW range. This price is close to the recent actual transaction price of 852.5 million KRW for an 80.59㎡ unit at Ipeonhansesang Xi in Dasan New Town last month.
The background behind the rise in officetel sale prices is attributed to the price ceiling system implemented since July last year. Apartments subject to the Housing Act are regulated by the price ceiling system, but officetels built under the Building Act are exempt from such regulations.
Additionally, as subscription and loan regulations on housing have tightened, investment demand has shifted to officetels as an alternative investment destination, which is also understood to have influenced the rise in sale prices. According to the Korea Real Estate Board, the number of officetel transactions in the Seoul metropolitan area in the first half of this year totaled 55,569, about 2% higher than last year's 54,489. In particular, transactions in Gyeonggi Province increased by 10.34% during the same period.
Park Dae-won, director of the Commercial Information Research Institute, said, "Officetel prices have risen to nearly apartment levels," adding, "In preferred areas such as Gangnam, Gwacheon, and Bundang, demand is high, and considering location, premium finishing materials, swimming pools, and other internal amenities, the sale prices seem to have been set high."
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