Office-tel Jeonse Prices Soar... Seoul Average Surpasses 200 Million Won for the First Time

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[Asia Economy Reporter Moon Jiwon] The average jeonse price of officetels in Seoul has surpassed 200 million KRW for the first time. Following the implementation of the two lease laws, the jeonse shortage, mainly in apartments, has spread, causing the jeonse and monthly rent prices of officetels, primarily inhabited by one- to two-person households, to rise significantly as well.

According to the nationwide officetel price trend survey released by the Korea Real Estate Board on the 5th, the average jeonse price of officetels in Seoul in September was 200.9 million KRW. This is the first time it has exceeded 200 million KRW since the statistics survey began in January 2018.

With the enforcement of the rent ceiling system and the right to request contract renewal, apartment jeonse prices have recently surged, leading some demand to shift to officetels. As a result, the officetel market has also experienced a continued shortage of jeonse supply, driving prices upward.

The jeonse price of officetels in Seoul rose by 0.33% in the third quarter, more than doubling the increase from the previous quarter (0.15%). The metropolitan area also saw a 0.35% rise, expanding from 0.07% in the previous quarter.

In contrast, the provinces (-0.53% → -0.04%) saw a reduction in the rate of decline. Accordingly, the nationwide officetel jeonse price shifted from a -0.04% decrease last quarter to a 0.27% increase.

Incheon (0.06%) experienced price increases due to positive factors such as its selection as a third-phase new town, increased moving demand in the fall, and rising apartment jeonse prices. Gyeonggi Province (0.47%) also saw jeonse prices rise compared to the previous quarter due to increased demand for newly built officetels.

The nationwide average officetel jeonse price was 164.08 million KRW, with the metropolitan area at 176.68 million KRW, Gyeonggi Province at 166.77 million KRW, Incheon at 126.45 million KRW, and the provinces at 112.03 million KRW.

Monthly rents nationwide rose by 0.07%, with increases in Seoul (0.10%), Gyeonggi (0.24%), and Sejong (0.48%), while Gwangju (-0.61%) and Ulsan (-0.15%) saw declines.

The average monthly rent nationwide was 661,000 KRW, with 699,000 KRW in the metropolitan area and 507,000 KRW in the provinces. By region, Seoul was 778,000 KRW, Gyeonggi 661,000 KRW, Incheon 542,000 KRW, and Busan 533,000 KRW, in that order.

Officetel sale prices also generally increased. The metropolitan area shifted from -0.26% to 0.02%, and Seoul’s increase expanded from 0.02% to 0.12%. Nationwide, the rate of decline narrowed from -0.32% to -0.06%.

In Seoul, the preference for officetels with excellent residential environments continued, and the solid demand for newly built officetels near subway stations sustained the upward trend.

In Gyeonggi Province, areas with good accessibility to Seoul and superior residential environments and infrastructure such as Seongnam, Suwon, and Yongin led the rise in officetel sale prices. Conversely, the provinces (-0.38%) saw price declines due to economic contraction caused by the COVID-19 pandemic.

The average officetel sale price in Seoul was 251.66 million KRW, 201.97 million KRW in Gyeonggi Province, and nationwide 203.78 million KRW, 217.45 million KRW in the metropolitan area, and 147.31 million KRW in the provinces.

The ratio of officetel jeonse price to sale price was 84.56% in the metropolitan area, 80.55% in the provinces, and 82.99% in Seoul.

By region, Sejong had the highest ratio at 90.90%, followed by Incheon at 86.12% and Gyeonggi at 85.85%. Nationwide, Ulsan had the lowest at 78.00%.

The nationwide yield on officetels was recorded at 4.76%, with 4.61% in the metropolitan area, 5.36% in the provinces, and 4.33% in Seoul.

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