As Apartment Prices Soar, New Town Residential Officetels Also Easily Surpass 1 Billion Won

Wirye Jiwel Prugio 84㎡ 1.25 Billion KRW 'Record High Price'
Mid-sized Officetels Near Ilsan KINTEX Double in Price in One Year
Up to 70% Loan Available... Popular Among Newlyweds and Others

A view of Wirye Jiwell Prugio officetel in Hakam-dong, Hanam-si, part of Wirye New Town

[Asia Economy Reporter Ryu Tae-min] As apartment prices soar in Seoul and the metropolitan area, the prices of residential officetels (commonly known as Apatel) in Gyeonggi-do are also rising accordingly. Officetels with an exclusive area of 84㎡ located in prime land development districts are frequently being sold for over 1 billion KRW. This is because, compared to apartments, there are relatively fewer regulations such as loan restrictions during the purchase process, attracting real demand buyers and investors who lack cash.

According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system on the 3rd, the 84㎡ officetel at Wirye Jiwell Prugio in Hakam-dong, Hanam-si, part of Wirye New Town, was traded at a record high of 1.25 billion KRW on the 23rd of last month. This price rose by more than 200 million KRW in just over a month after surpassing 1 billion KRW for the first time in December last year.

Similar cases of officetels with the same area exceeding 1 billion KRW are occurring in other new towns as well. The 84㎡ officetel at Hillstate Ilsan in Daehwa-dong, Ilsan New Town, and the 84㎡ officetel at Gwanggyo Joongheung S-Class in Gwanggyo New Town were traded at record highs of 1.04 billion KRW and 1.03 billion KRW respectively in December last year.

In particular, the price increase trend of officetels around KINTEX in Ilsan New Town is remarkable. The 84㎡ Hillstate Ilsan was traded at 450 million KRW as recently as January last year, but its price has more than doubled in one year. Nearby, the 84㎡ KINTEX Kkum-e Green rose from 457 million KRW to 850 million KRW during the same period, and the 84㎡ Ilsan The Sharp Gravista increased from 440 million KRW to 865 million KRW, showing a similar rate of increase.

Generally, residential officetels have lower space utilization even with the same exclusive area due to smaller service areas such as balconies. Nevertheless, the high demand is attributed to easier financing as they are exempt from loan regulations, according to industry evaluations. Apartments in speculative overheating districts have a loan-to-value ratio (LTV) capped at 40%, and for amounts exceeding 900 million KRW, it drops to 20%. Loans are completely prohibited for amounts exceeding 1.5 billion KRW. In contrast, officetels can receive up to 70% loans regardless of market price. A representative from Wirye New Town B Real Estate Agency said, "Even for the same 1 billion KRW property, the maximum loan limit for an apartment is 380 million KRW, but for an officetel, it is 700 million KRW," adding, "This means that officetel buyers bear less of their own capital burden."

Especially, investors are highly interested because owning a residential officetel still qualifies them as non-homeowners in subscription applications.

Seo Jin-hyung, president of the Korea Real Estate Society, said, "As apartment prices in Seoul and the metropolitan area have risen sharply recently, demand has ballooned into residential officetels," adding, "They are popular among younger generations because they can enter the subscription market without obstacles and avoid the strict apartment loan regulations."

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