"Sold Out Due to High Demand"... Office-tels in Gyeonggi and Incheon Experience 'Complete Sell-Out' Streak

Popularity of Officetels as Apartment Alternatives
Only 4 Out of 21 Unsold Units in Gyeonggi and Incheon from June to September
Escaping the 'Unsold Graveyard' Since Early Year

Office-tel buildings in front of Ewha Womans University, Daehyeon-dong, Seodaemun-gu, Seoul (Photo by Ryu Taemin)

[Asia Economy Reporter Ryu Taemin] As the nationwide unsold housing units have reached an all-time low, the officetel sales market is also gaining popularity. In particular, demand seeking 'substitutes' due to soaring apartment prices is pouring in, creating a lively atmosphere even for officetels in Gyeonggi and Incheon, which had a large number of unsold units until early this year.

According to the housing statistics for August released by the Ministry of Land, Infrastructure and Transport on the 5th, the number of unsold housing units nationwide as of the end of August was 14,864 units. This is the lowest level since the government began compiling related statistics in 2000, breaking the previous record of 15,198 units set in the previous month.

The number of unsold officetels in the Incheon and Gyeonggi areas is also sharply decreasing. Since June this year, 21 officetel complexes have been sold in the Incheon and Gyeonggi areas, with only 4 remaining unsold. This contrasts sharply with the period from early this year to May, when 10 out of 13 complexes sold in Gyeonggi and Incheon remained unsold.

In particular, as more officetels are sold in areas preferred by actual users, complexes with high competition rates are emerging one after another. The ‘Dongtan Station Dietre Prestige’ officetel, sold in Dongtan in June, recorded an average competition rate of 83 to 1 with 26,783 applicants for 323 units. Last month, the ‘City OCELE 4 Complex’ officetel supplied in Yonghyeon-Hakik District, Michuhol-gu, Incheon, recorded a record-high competition rate of 210 to 1 for the 84㎡ type, marking the highest ever in the area.

The reason officetels are gaining popularity is that they are considered alternative residential facilities to apartments for young people without homes. Recently introduced residential officetels called ‘Apatel (Apartment + Officetel)’ tend to offer a high supply of medium to large-sized units preferred by buyers, and most have apartment-like structures such as slab-type cross-ventilation layouts, 'ㄷ'-shaped kitchens, and storage cabinets.

Additionally, due to regulations such as the price ceiling system reducing apartment supply and the high threshold for apartment subscription remaining unchanged, those with low subscription scores seem to be turning their attention to officetels. Currently, officetels can be subscribed to regardless of whether one has a subscription savings account, and winners are selected by lottery. Unlike apartments, officetels are not included in the calculation of the number of houses when calculating subscription points, which is also considered an important factor.

With officetel prices on the rise, investment demand aiming for capital gains is also gathering momentum. According to real estate statistics from the Korea Real Estate Board, the average nationwide officetel sale price in July was 208.51 million KRW. This is 5.06 million KRW higher than the 203.45 million KRW recorded a year earlier.

Ye Kyung-hee, senior researcher at Real Estate 114, said, “Recently, due to strong regulations on the apartment market such as loans and taxes, and a shortage of supply, demanders seem to have turned their attention to the officetel market,” adding, “Officetels are considered as non-homeowners when applying for subscriptions and are exempt from acquisition tax heavy penalties for multiple homeowners, among other advantages, which are factors driving their popularity.”

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