"More Expensive Than Apartments but Accepted First" Officetel 'Seondanghugom' Subscription Fever

This Week's Major Apartels Achieve Strong Subscription Success
Despite High Price Controversy, Record Competition Rates in the Area

As apartment prices have surged recently, the transaction prices of officetels, considered an 'alternative product,' are also soaring. Last month, the average transaction price of officetels in Seoul approached 300 million won, and the average transaction prices of officetels in the Seoul metropolitan area, including Gyeonggi and Incheon, all set record highs. The photo was taken on the afternoon of the 27th of last month at a real estate agency office in Seoul.

The officetel subscription market is heating up at the end of the year as housing buyers and investors, who have lost options due to soaring apartment prices and various regulations, are simultaneously seeking alternatives.

According to industry sources on the 2nd, major officetels nationwide that opened subscriptions this week all recorded competition rates of several tens to one, continuing their popularity.

In particular, properties that allow resale are attracting a large number of investors, leading a "buy first, worry later" craze. A representative example is the "Hillstate Cheonan Asan Station First," which opened subscriptions on the 30th of last month. This complex is not subject to resale restrictions, making "chopi" (premium trading of pre-sale rights) possible, attracting short-term demand. Being in a non-regulated area, it is free from resale restrictions as well as re-subscription bans and residency obligations. Through chopi transactions, it is possible to aim for profits of hundreds of thousands to millions of won without paying any deposit. This complex offered 914 units of 84㎡ exclusive area and attracted 79,877 applicants, recording a competition rate of 87.4 to 1.

"Cheongna Hanyang Sujain The Destin" and "Songdo Americantown The Sharp" do not allow chopi transactions but attracted demand due to their location, favorable conditions, and expected price gains. Cheongna Hanyang Sujain The Destin, which supplies 702 units (84㎡), attracted 27,377 applicants, recording a competition rate of 39 to 1. The average sale price was around 750 million won, evaluated as 10-20% cheaper compared to surrounding market prices. After ownership transfer registration, resale is expected to yield profits ranging from 50 million to 130 million won.

Songdo Americantown The Sharp officetel offered 129 units of 82㎡ exclusive area and attracted 41,012 applicants, recording a competition rate of 317.9 to 1. This is the highest competition rate among major officetels sold this week, largely attributed to location and expected price gains. Songdo is showing unstoppable housing price increases due to GTX and the attraction of the bio-industry. Mr. K, the representative of Incheon Research Office Songdo-dong A Real Estate Agency (licensed), said, "The 82㎡ sale price of this complex is about 697 million won, which is at least 100 million won cheaper compared to surrounding market prices," adding, "It is popular because it scores well in both actual residence and investment aspects."

Some places succeeded in popularity despite high sale price controversies. The "Hillstate The Unjeong," the largest residential complex in Paju Unjeong New Town, which opened subscriptions on the 1st, received 27,027 applications for 2,669 units (84㎡), recording an average competition rate of 10 to 1. The sale price for 84㎡ was evaluated as somewhat high at 885.2 million to 895.8 million won, but it succeeded in popularity. It also became the officetel with the highest competition rate in Paju history and the complex with the most subscription applications in Paju.

Officetels do not require subscription savings accounts and select winners by 100% lottery, making them popular among younger generations and newlyweds with low subscription points. No funding plan documents are required, and officetel pre-sale rights are not included in the housing count. Additionally, the loan-to-value ratio (LTV) can be applied up to 70%, reducing initial financial burdens, which attracted both actual buyers and investors.

Experts predict that the officetel subscription fever will continue this month as well, as total debt service ratio (DSR) regulations will apply to officetels starting January next year. From January next year, those who borrow 200 million won or more, and from July next year, those who borrow 100 million won or more, will be subject to borrower-specific DSR regulations. The construction industry is also releasing many units to avoid DSR regulation application. According to Real Estate R114, the number of officetel units scheduled for sale nationwide in December is 9,030, about three times more than 3,195 units in the same month last year. This is the highest level in four years since December 2017, when 9,665 units were sold.