Residential officetels, also known as 'apatels,' which were once spotlighted as alternatives to apartments, are being shunned in the market. They have been hit hard by high interest rates and tightened loan regulations. On top of this, with the rapid drop in jeonse prices, the market is even flooded with 'negative premium' (mapi - prices lower than the pre-sale price) listings.
According to the pre-sale industry on the 7th, officetel units of 'Eluke Banpo' near Gyodae Station in Seocho-gu, Seoul, scheduled for move-in this June, are being released into the market. Some listings on real estate portals show prices lowered by 80 million KRW compared to the pre-sale price.
Similarly, mapi listings have appeared for the 'Pangyo Valley Xi' officetel in Godeung-dong, Sujeong-gu, Seongnam. A pre-sale right for an 84㎡ unit in Complex 2 was listed at 684 million KRW, which is 140 million KRW lower than the pre-sale price.
Until early last year, residential officetels were gaining attention as alternatives to apartments. At that time, the loan-to-value ratio (LTV) for housing mortgage loans in the metropolitan area was around 40%, but officetels enjoyed a maximum LTV of 70%, benefiting from this difference. They were popular among buyers with low subscription scores because applications could be made without a subscription savings account and were conducted via 100% lottery.
However, the market changed drastically due to loan regulations on residential officetels implemented this year. According to the Financial Services Commission's 'Strengthened Household Debt Management Plan,' from January this year, non-residential mortgage loans such as those for officetels, commercial buildings, office buildings, and land are subject to a borrower-specific debt service ratio (DSR) limit of 40%, reducing loan limits.
Moreover, regardless of the repayment period, the maturity is fixed at 8 years for calculation, resulting in much lower loan limits compared to apartments, which can have maturities up to 40 years. Consequently, officetel buyers who purchased units in 2020-2021 and are scheduled to move in this year face urgent difficulties in securing funds for the remaining payments.
Some predict that cases of contract cancellations due to failure to prepare the remaining payments among residential officetel buyers will increase, and a significant price correction due to decreased demand is expected.
An industry insider said, "There have already been some cases in the past 1-2 years where buyers who purchased units have canceled contracts because they could not prepare the remaining payments," adding, "This trend is expected to continue for the time being."
Lee Eun-hyung, a research fellow at the Korea Construction Policy Research Institute, diagnosed, "Income-generating real estate inevitably suffers when interest rates rise. Except for some well-located areas such as near subway stations, the price adjustment range will be large."
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