Oversupply Amid COVID-19... This Year, Only Officetel Prices in Seoul and Sejong Increased

[Asia Economy Reporter Onyu Lim] This year, the region with the highest increase in officetel sale, jeonse, and monthly rent prices was Sejong.

According to Zigbang on the 14th, the nationwide change rate in officetel sale prices this year was -0.47%, with only Sejong (0.43%) and Seoul (0.42%) showing an increase.

Prices fell in Ulsan (-2.44%), Incheon (-1.57%), Busan (-1.54%), Gyeonggi (-0.80%), Daegu (-0.73%), Daejeon (-0.68%), and Gwangju (-0.65%).

The provinces, where supply exceeded demand relatively, led the decline in officetel prices with -1.33%. The prolonged COVID-19 pandemic and resulting regional economic downturn also had an impact.

Officetel jeonse prices also showed the highest increase in Sejong (1.97%), followed by Seoul (1.15%), Gyeonggi (1.14%), Daegu (0.74%), Ulsan (0.36%), and Incheon (0.21%). Gwangju (-1.43%) and Busan (-0.98%) saw decreases.

Monthly rent prices rose the most in Sejong (0.99%) and fell the most in Gwangju (-6.46%).

Ham Young-jin, head of Zigbang Big Data Lab, analyzed, "Sejong had the highest apartment price increase rate nationwide this year. The positive factors of the administrative capital relocation and expectations for transportation network expansion seem to have been reflected in the rise of officetel sale, jeonse, and monthly rent prices."

This year, the officetel market overall remained weak due to oversupply in recent years and the supply impact of urban lifestyle housing. Especially after August 11, the tax law was revised so that officetels are counted as housing units regardless of whether they are for business or residential use when considering acquisition tax surcharges, causing a sharp decline in investment demand.

Zigbang explained, "The prolonged COVID-19 pandemic and the inclusion of officetels in the housing unit count at acquisition are variables for next year's officetel market. Since officetels are strongly characterized as rental income products, they are sensitive to economic fluctuations, and if investment costs including sale prices increase, profitability is likely to decline."

As of last month, the nationwide officetel rental yield was 4.76%, and 4.62% in the metropolitan area, down from the 5% range last year.

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