April Seoul Officetel Jeonse Rate Hits Record High at 83.1%

June 2020, Steady Rise Over 80%
Cases of Jeonse Prices Surpassing Sale Prices
Demand Expected to Increase Due to Investor and Real Buyer Influx

Photo by Yonhap News

[Asia Economy Reporter Hwang Seoyul] The jeonse-to-sale price ratio (hereafter jeonse ratio) of officetels in Seoul has reached the highest level since related statistics began.

According to KB Real Estate on the 1st, the officetel jeonse ratio in April was 83.1%, marking the highest figure since the related statistical survey started in July 2010. The officetel jeonse ratio first exceeded 80% in June 2020 (80.3%) and has shown a steady upward trend since then.

As the jeonse ratio rises, cases where the jeonse price surpasses the sale price have also emerged in the sales market. According to the Ministry of Land, Infrastructure and Transport's actual transaction price system, a unit with an exclusive area of 17.44㎡ in 'Magok Jwell Estate' in Gayang-dong, Gangseo-gu, was sold for 102 million KRW on March 19, but the same size unit was leased for jeonse at 105 million KRW on March 30, 3 million KRW higher.

With the officetel jeonse ratio in Seoul reaching a record high, demand is expected to increase. As the gap between sale prices and jeonse prices narrows, more investors may seek to purchase real estate with less capital.

Moreover, as Seoul apartment jeonse prices rise, officetels are serving as substitutes, further boosting demand. Last month, the average jeonse price for Seoul apartments was 675.7 million KRW, a sharp increase of 0.9% compared to January and 10.76% compared to a year ago.

An industry insider stated, “With the soaring apartment jeonse prices and loan regulations making apartment investment difficult, people are turning their attention to officetels, so the upward trend of officetels is expected to continue.”

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