Office-tel Auction Heats Up... Seoul Office-tel Winning Bid Rate Soars to 100% for the First Time in 19 Years

July Seoul Officetel Winning Bid Rate at 102.4%... Highest in 19 Years
Demand Shifts to Officetels as Apartment Prices Soar
Sales Market Also Booming... Average Sale Price Up 30 Million Won in One Year

[Asia Economy Reporter Ryu Tae-min] As apartment prices continue to rise, the popularity of officetels, considered a 'substitute,' is soaring in the court auction market as well. The auction success rate for officetels in Seoul in July exceeded 100%, marking the highest level in 19 years since 2002. Analysts suggest that buyers who cannot afford the soaring housing prices are flocking to officetels as alternatives, causing overheating even in auctions.

According to Gigi Auction, a court auction specialist company, the auction success rate for officetels in Seoul in July was 102.4%, up 2.4 percentage points from 100.0% in the previous month. This is the second highest since the company began compiling statistics in 2001.

This is the first time since July 2002 (103.84%) that the monthly auction success rate for officetels in Seoul has exceeded 100%. In the first half of this year, the auction success rate for officetels in Seoul rose significantly compared to previous years. ▲January recorded 88.42%, ▲February 82.87%, ▲March 80.95%, ▲April 81.55%, ▲May 92.40%, and ▲June 100.0%. Last year's average auction success rate was 79.37%, failing to surpass 80%.

Some officetel auction prices reached about 1.5 times the appraised value. An officetel in Hannam-dong, Yongsan-gu, Seoul, with a 51㎡ (exclusive area), was auctioned on the 6th for 789,999,000 KRW. This price was more than 250 million KRW higher than the appraised value of 534 million KRW, with an auction success rate of 148%. There were 13 bidders.

This appears to be due to the sharp rise in apartment and housing prices, leading demand to flock to officetels, considered substitutes for apartments. In particular, as the rent and monthly lease prices of Seoul apartments have also surged recently, concerns about housing instability have increased, prompting more tenants to seek officetels.

The enthusiasm for officetels is also evident in the sales market. According to the 'KB Officetel Market Trend Report Based on KB Statistics' released by KB Financial Group on the 25th, the average sales price of officetels in the metropolitan area in June this year was 260 million KRW, up 30 million KRW from 230 million KRW a year ago.

Joo Hyun Lee, a senior researcher at Gigi Auction, explained, "It seems that not only investment demand aiming for rental income but also actual demand for residential purposes has flocked to the officetel market," adding, "As officetel sales prices have recently surged significantly, the auction market, considered relatively affordable, has gained popularity, causing the auction success rate to rise."

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