Which Officetel Had the Highest Price Increase This Year? Not Seoul but OO

The Area with the Highest Increase in Sale, Jeonse, and Monthly Rent Prices is Sejong City
Office-tel Prices Rise Following Apartments Amid Active Discussions on Administrative Capital Relocation

High-rise officetels and apartments around Sejong Lake Park

[Asia Economy Reporter Onyu Lim] This year, the region with the highest increase in officetel sale, jeonse, and monthly rent prices nationwide was Sejong City. As discussions on the 'administrative capital relocation' gained momentum, housing prices in Sejong surged, affecting not only apartments but also the non-apartment market.

According to Zigbang on the 19th, the nationwide change rate in officetel sale prices this year was -0.47%, with only Sejong (0.43%) and Seoul (0.42%) showing increases. 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%). Ham Young-jin, head of Zigbang Big Data Lab, explained, "In addition to regional economic downturns caused by the prolonged COVID-19 pandemic, the local areas (-1.33%) with relatively higher supply compared to demand led the decline in officetel prices."

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%) experienced declines. Monthly rents also rose the most in Sejong (0.99%), while Gwangju (-6.46%) saw the largest drop.

Sejong recorded the highest apartment price increase rate nationwide this year. Apartment prices in Sejong, which had been rising since the beginning of the year, began to surge rapidly after Daejeon was designated as a regulated area under the June 17 real estate measures. Amid this, the ruling party announced plans to promote the administrative capital relocation in July, causing Sejong housing prices to soar. According to the Korea Real Estate Board, as of last month, the apartment sale price increase rate by city/province this year was highest in Sejong at 43.64%, the highest nationwide. This is 2.7 times that of Daejeon (16.01%), which ranks second among metropolitan cities and provinces. Moreover, the jeonse price increase is even steeper. It has jumped 49.34% this year, nearly four times the second-place Ulsan (12.97%).

Ham explained, "The positive factors of the administrative capital relocation and expectations for transportation network expansion appear to have contributed to the rise in officetel sale, jeonse, and monthly rent prices."

Nationwide, the officetel market has generally remained weak this year due to oversupply in recent years, supply of urban lifestyle housing, and the impact of COVID-19. In particular, since August 11, residential officetels have been included in the housing count when determining whether to impose additional acquisition tax on houses, following a revision in tax law, which sharply reduced investment demand.

Ham said, "The prolonged COVID-19 pandemic and the inclusion of officetels in the housing count upon 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 purchase prices increase, profitability is likely to decline."

As of last month, the officetel rental yield was 4.76% nationwide 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.