"Similar Size, Half the Price" Buyers Opt for This Instead of 1.3 Billion-Won Standard Apartments... Prices Jump 70 Million Won in One Month [Real Estate AtoZ]

Apartment Transactions for 84m² Units Drop 18% in a Year
Demand Shifts to Spacious Officetels Amid Soaring Apartment Prices
Officetel Sales and Rental Prices Rise in Tandem

Mid-to-large-sized officetels, considered an alternative to apartments in Seoul, have surged by 70 million won in just one month. The rise in apartment sale and lease prices is fueling demand for officetels.

Panoramic view of 'Mullae Station Daewoo Ian' in Yeongdeungpo-gu, Seoul. Naver Real Estate

An analysis of the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system on July 24 shows that mid-to-large-sized officetels near subway stations in Yeongdeungpo-gu, Seoul, have been trading at several tens of millions of won higher than before since the beginning of this year. Yeongdeungpo-gu has the second highest number of officetels among Seoul's districts, after Gangseo-gu. Furthermore, 4 out of every 10 large-scale officetel deals in Seoul this year have been concentrated in Yeongdeungpo-gu, making it the most active trading area.

The 106-square-meter exclusive officetel unit in 'Yeongdeungpo SK Leaders' View' near Mullae Station on subway line 2 was sold for 1.14 billion won (35th floor) this April, up by 70 million won compared to the same size unit on the 22nd floor traded about a month earlier. The exclusive 96-square-meter unit in 'Mullae Station Daewoo Ian' in the same station area was also traded at 890 million won (10th floor) this April, up 55 million won compared to the 11th-floor transaction last December.

The exclusive 70-square-meter unit in 'Sindorim Prugio 1st' near Sindorim Station (subway lines 1 and 2) changed hands at 700 million won (25th floor) last month, exceeding the 17th-floor deal from three months earlier by 35 million won. Analysts see this as a shift in demand, with buyers now targeting large officetel units that can be lived in like a home, rather than one-room style small units.

The increase in officetel transactions in Seoul this year outpaced that of apartment trades. As of July 22 this year, a total of 12,425 transactions of apartments measuring about 84 square meters were recorded in Seoul, down 18% (2,727 transactions) from the same period last year.

In contrast, trades of large officetels have increased. Transactions for units over 60 square meters, classified as mid-to-large, increased by 45.3% (263 cases) from 580 last year to 843 this year for the same period. While total officetel transactions have decreased by 3.8%, only those mid-to-large-sized units have increased. Among them, mid-to-large (over 60 square meters up to 85 square meters) increased by 58%, from 345 to 545, and large (over 85 square meters) increased by 26.8%, from 235 to 298.

The main reason for the surge in large officetel transactions is their lower price compared to apartments of similar size. In Seoul, apartments measuring about 84 square meters are on average 547.72 million won more expensive than officetels. The average transaction price was 1.28373 billion won for apartments and 736.01 million won for officetels.

Park Wongap, Chief Real Estate Specialist at KB Kookmin Bank, stated, "Mid-to-large-sized officetels are a clear alternative alongside small apartments, and they are closer to actual homes where people would live, not one-room types designed for rental." He added, "The shortage of jeonse apartments has stimulated young buyers to purchase mid-to-large-sized officetels."

Trades of large officetels have decreased in Gangnam's three districts but surged in Yeongdeungpo-gu. In Gangnam, Seocho, and Songpa districts, trades dropped by 53.3% from 45 last year to 21 this year. Meanwhile, Yeongdeungpo-gu saw trades increase by 123.1%, from 52 to 116.

Park further explained, "Demand has shifted to Yeongdeungpo-gu, where prices are relatively lower than in the Gangnam area. It appears that buyers have chosen areas that have seen less price increase over those that have risen sharply."

The Korea Real Estate Board reported that Seoul's officetel sales prices rose 0.24% in the second quarter compared to the previous quarter, analyzing that prices rose mainly for relatively new units in central areas near subway stations that are good alternatives to apartments.

Rental prices have also risen sharply. The average jeonse (long-term deposit lease) price of Seoul officetels increased by 0.40% in the second quarter, marking the largest jump in four years since the second quarter of 2022 (0.42%). Monthly rents rose by 0.90%, the highest increase since relevant statistics began in 2018. Last month, the Seoul officetel monthly rental price index reached 105.46, setting an all-time high for the 30th straight month since January 2024. The average monthly rent was 936,000 won.

This content was produced with the assistance of AI translation services.