Large Units Rival Apartments: "Seoul Officetel Sale Price Gains Widen" [Real Estate AtoZ]

KB Real Estate Officetel Statistics
Impact of 10·15 Measures Drives Strength in Large Units
Up 1.03% Compared to Previous Month

This month, the sale prices of officetels in Seoul have seen a greater increase compared to the previous month, according to KB Real Estate. It is interpreted that the so-called "balloon effect" is intensifying, as demand displaced by the government's stringent 10·15 measures is shifting to officetels.

According to KB Real Estate's November officetel statistics, released on the 23rd and based on data as of the 10th, the sale price of Seoul officetels rose by 0.38% compared to the previous month. Given that the increase in October was only 0.09%, the rise has expanded more than fourfold. As a result, the price of Seoul officetels has continued to climb for ten consecutive months since February this year.

Large Officetels Surge 1.03%... Inflow of Apartment Demand

Tower Palace, Dogok-dong, Gangnam-gu, Seoul. Photo by Yonhap News Agency

The notable feature of this upward trend is that large-sized units, which can serve as alternatives to apartments, have led the increase. By unit size, large officetels jumped by 1.03%, marking the highest growth rate. Medium-to-large units rose by 0.43%, and ultra-small units by 0.10%. In contrast, small officetels saw only a 0.04% increase. Looking at the past year, large units have risen by nearly 6%, while small units (0.12%) have remained almost flat, clearly showing that the larger the unit, the greater the price increase.

By region, areas with major business districts and affluent neighborhoods were particularly strong. The southwestern region, which includes Yeouido, recorded the largest increase at 0.69%, followed by the southeastern region, which includes Gangnam, at 0.30%. Demand has been concentrated on high-priced, large officetels, such as those in mixed-use complexes in Yeouido and Tower Palace in Dogok-dong, Gangnam-gu, which has driven up the overall indicators.

KB Real Estate analyzed that the 10·15 measures had a significant impact on this trend. As all of Seoul was designated as a heavily regulated area, apartment transactions became more difficult, prompting buyers to turn to medium-to-large officetels, which are subject to less stringent regulations and have layouts similar to apartments.

Nationwide Officetel Prices Also Turn Upward... Seoul Average Surpasses 300 Million Won

Buoyed by the strong performance of Seoul officetel prices, the nationwide average sale price of officetels also reversed its downward trend and began to rise. This month, the nationwide average sale price of officetels increased by 0.04% compared to the previous month.

The nationwide average sale price of officetels was 262.24 million won, with the Seoul metropolitan area at 271.98 million won and Seoul at 305.98 million won.

The average jeonse (long-term lease) price was 203.79 million won nationwide, 213.61 million won in the metropolitan area, and 236.46 million won in Seoul.

Meanwhile, the nationwide rental yield stood at 5.43%, maintaining the 5% range for 31 consecutive months.

In the metropolitan area (5.27%), Seoul recorded 4.82%, Incheon 6.35%, and Gyeonggi Province 5.47%, respectively.