As Apartment Prices Rise, Officetels Also... 0.43% Increase in the Seoul Metropolitan Area

Korea Real Estate Board Q2 Officetel Price Survey

[Asia Economy Reporter Moon Jiwon] As apartment prices in Seoul and the metropolitan area have risen significantly, the sale prices of officetels, which are substitutes, have also shown an upward trend.

The Korea Real Estate Board announced on the 15th that its survey of officetel prices in the second quarter of this year showed a 0.43% increase in the metropolitan area compared to the previous quarter, expanding from the 0.31% rise in the first quarter.

In the metropolitan area, prices had been declining by -0.26% until the second quarter of last year, but turned to a 0.02% increase in the third quarter, followed by 0.10% in the fourth quarter, 0.31% in the first quarter of this year, and 0.43% in the second quarter, marking three consecutive quarters of increasing growth.

While Seoul’s increase narrowed from 0.22% to 0.07%, Gyeonggi Province rose from 0.53% to 0.64%, and Incheon from 0.00% to 1.03%. Incheon saw a surge in buying demand as expectations for rising housing prices grew following the announcement of the 4th railway network construction plan, along with a perception that the area was relatively undervalued.

In Gyeonggi Province, amid the ongoing upward trend in apartment sale prices, the rise accelerated mainly in nearby areas benefiting from transportation developments such as the Metropolitan Express Railway (GTX).

Officetel jeonse (long-term lease) prices saw a slight decrease in the rate of increase. In the metropolitan area, the rise slowed from 0.62% to 0.45%, with Seoul’s increase narrowing from 0.58% to 0.26%, and Gyeonggi’s from 0.76% to 0.61%. However, Incheon’s increase expanded from 0.38% to 0.61%.

In Seoul, due to the prolonged shortage of housing jeonse supply, demand flowed into officetels with good residential conditions or expectations of improved living environments.

In Incheon and Gyeonggi Province, as apartment jeonse prices rose significantly, the jeonse prices of medium-to-large officetels or those with favorable transportation conditions mainly increased.

Officetel monthly rents in the metropolitan area also continued a high growth rate, though the increase narrowed from 0.28% to 0.21%.

The Real Estate Board analyzed, "Although new officetel supply continues in Seoul, monthly rents rose by 0.11% compared to the previous quarter, supported by demand centered in areas near subway stations and with good residential environments."

In Incheon, monthly rents increased mainly in Seo-gu and Bupyeong-gu, where residential conditions are relatively favorable, as demand shifted from jeonse to monthly rent due to rising apartment and officetel jeonse prices.

In Gyeonggi Province, monthly rents rose mainly in Seongnam Sujeong, where redevelopment relocation demand exists, and in Goyang Deogyang and Yongin Giheung, which have relatively good access to Seoul.

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