Seoul Officetel Transactions Up 32% After October 15 Measures... Prices Remain Steady [Real Estate AtoZ]

Transactions Centered on Small and Mid-Sized Units
Highest Volumes in Gangnam, Yeongdeungpo, and Mapo
Officetel Prices Remain Largely Unchanged Before and After the Measures

Following the announcement of the October 15 real estate measures, the volume of officetel transactions in Seoul increased by 32%. While apartment transactions declined due to the expansion of regulated areas and tighter loan restrictions, officetels, which are relatively less affected by these regulations, saw an increase in transactions.

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

According to Zigbang on December 15, the number of officetel sales transactions in Seoul rose from 1,001 before the announcement of the real estate measures to 1,322 as of the 10th of this month, marking an increase of about 32%. As the regulations primarily targeted apartments, demand for officetels, which remained outside the main scope of the policy, appears to have been maintained.

During the same period, the number of apartment transactions in Seoul dropped sharply by about 62%, falling from 14,038 before the measures to 5,367 after. This significant decline is largely attributed to stricter loan regulations, the expansion of land transaction permit zones, and the designation of additional regulated areas, which have limited investment-driven purchases, leaving mainly end-user transactions in the market.

Looking at the status of officetel transactions, the rate of increase and transaction volumes varied by district. The highest growth rates were recorded in Dongjak-gu (233%), Seodaemun-gu (120%), and Nowon and Seongbuk-gu (100%). In terms of actual transaction volumes, the largest numbers were seen in major business districts and areas with a high concentration of officetels in the city center, such as Gangnam-gu (128 transactions), Yeongdeungpo-gu (122), Mapo-gu (119), and Songpa-gu (117).

Comparison of apartment and officetel transaction volumes in Seoul before the October 15 real estate measures and as of the 10th of this month. Provided by Zigbang

The trend of transactions being centered on small and mid-sized officetels continued even after the announcement of the real estate measures. Although there were expectations that transactions of larger units would increase as officetels gained attention as alternative residential options to apartments, the market maintained the highest proportion of transactions in units under 40 square meters and between 40 and 60 square meters. Large units over 85 square meters did not show a clear increase and remained at previous levels. Given the nature of officetels, which are valued for both residential use and rental income, both end-user and investment demand play a role, maintaining a preference for small and mid-sized units.

Unlike the change in transaction volume, officetel prices remained largely stable. The average transaction price for officetels in Seoul was 333.97 million won before the measures and 338.65 million won after, showing little difference. The median price also saw only a slight adjustment, from 219 million won to 210 million won. This suggests that the increase in transactions was evenly distributed across complexes with more accessible price points, rather than being concentrated in high-priced areas.

While the increase in officetel transactions is analyzed as a short-term dispersal effect caused by regulations, prices showed almost no change despite the higher transaction volume. Structural constraints in the current market environment appear to be limiting a full-scale expansion of investment demand.

Kim Eunsun, Head of the Big Data Lab at Zigbang, explained, "Given that officetels serve both residential and rental income purposes, they are highly sensitive to external factors such as interest rates, rental market trends, and lending conditions. Especially if prices rise, investment demand could diminish again, and we may see demand shift to other housing alternatives. The recent increase in transactions could reflect either short-term volatility or a sign of changing market trends, so it is important to monitor how market conditions and demand structures develop going forward."