Office-tel Sales and Jeonse Prices Fell Sharply in Q4 Last Year... Only Monthly Rent Increased

Korea Real Estate Board Announces '2024 4th Quarter Officetel Price Trend Survey Results'
Nationwide officetel sale prices down 0.40% quarter-on-quarter
Jeonse prices fall by 0.25%, monthly rent rises by 0.4%

An officetel located in Noryangjin, Dongjak-gu, Seoul, where civil service exam academies and entrance exam academies are concentrated. Photo by Jinhyung Kang aymsdream@

In the fourth quarter of last year, the nationwide sale and jeonse prices of officetels saw a larger decline compared to the previous quarter. Meanwhile, monthly rent showed an upward trend.

The Korea Real Estate Board announced on the 15th, through the '2024 4th Quarter Officetel Price Trend Survey Results,' that the nationwide officetel sale price in the fourth quarter of last year fell by 0.40% compared to the previous quarter. Jeonse prices dropped by 0.25%. Both sale prices and jeonse prices declined by 0.05 percentage points more than the previous quarter. Monthly rent rose by 0.4%, increasing more than the previous quarter (0.34%).

Looking at officetel sale prices by region, Seoul saw a 0.02% increase. Demand for newly built officetels near subway stations remained steady, continuing the upward trend, but the rate of increase narrowed compared to the previous quarter (0.05%) due to loan regulations. Across the entire metropolitan area, prices fell by 0.28%. Incheon (-0.63% → -0.81%) and Gyeonggi (-0.36% → -0.38%) saw larger declines. The cause is attributed to the supply of new officetels centered in Incheon and a decrease in both actual residence and investment demand due to loan regulations.

In the provinces, prices declined mainly in Daegu and Gwangju, where listings accumulated. Overall sale prices dropped by 0.86%, widening the decline compared to the previous quarter (-0.83%).

Officetel jeonse prices fell nationwide (-0.25%), in the metropolitan area (-0.13%), and in the provinces (-0.68%) compared to the previous quarter. Only Seoul saw a 0.02% increase due to rising demand mainly from single-person households such as university students and office workers. However, Seoul’s increase was smaller than the previous quarter (0.07%).

Monthly rent decreased only in the provinces (-0.02%) but rose nationwide (0.40%) and in the metropolitan area (0.51%). Incheon (0.63% → 0.98%) and Gyeonggi (0.35% → 0.49%) saw larger increases than the previous quarter, while Seoul’s increase narrowed (0.49% → 0.35%). In Seoul, demand for relatively clean officetels near subway stations continued. It is analyzed that the price decline of aging officetels had an impact.

Monthly rent for provincial officetels narrowed its decline from the previous quarter (-0.10%) to a 0.02% drop. The officetel market in the fourth quarter of last year is analyzed to have continued a preference for monthly rent over jeonse due to the aftermath of jeonse fraud.

As of December last year, the average sale price of officetels nationwide was 223.73 million KRW. The nationwide average jeonse price was 177.17 million KRW. The average monthly rent deposit was 16.49 million KRW, and monthly rent was recorded at 782,000 KRW.