Jeonse Fraud and High Interest Rates... Officetel Sales Decrease by Over 30% for Two Consecutive Years

26,696 Transactions Last Year... 38% Sharp Decline
Incheon, Gyeonggi, Seoul See Over 40% Drop in Transactions

Following the jeonse fraud, the aftermath of reverse jeonse, high interest rates, and falling house prices, officetel sales decreased by 38% last year.

Seoul Gwanghwamun area with a dense concentration of officetels. / Photo by Yonhap News

Real estate information company Zigbang announced on the 13th that, based on an analysis of nationwide officetel sales data from the Ministry of Land, Infrastructure and Transport, the number of sales last year was 26,696, a 38% decrease compared to the previous year (43,558 transactions). This marks a decline of over 30% for two consecutive years from 63,010 transactions in 2021.

By region, Incheon recorded 2,277 transactions last year, down 50% from 4,549 the previous year. This was followed by Gyeonggi (-44%), Seoul (-42%), Gangwon (-39%), Daegu (-33%), and Busan (-32%) in order of the largest decreases.

By exclusive area, transactions of 60㎡ or less accounted for an overwhelming 84.81%. This is believed to be due to concentrated residential demand from newlywed couples and 1-2 person households in urban areas. Transactions of 60~85㎡ accounted for 12.67%, and those over 85㎡ made up only 2.52%.

By price range, transactions under 600 million KRW accounted for 97.2% of the total. Specifically, transactions between 100 million and 200 million KRW accounted for 38.04%, and those between 200 million and 600 million KRW accounted for 32.09%. The number of low-priced quick sales also increased. Officetel transactions under 100 million KRW rose by 4.89 percentage points compared to the previous year.

Last year, the officetel market showed a decoupling trend from the apartment market. The apartment sales market temporarily rebounded from February to October, with over 30,000 transactions each month, influenced by the 1·3 measures and the launch of the Special Home Loan Program. However, officetel sales remained around 2,000 transactions per month. In recent years, officetel transaction patterns were similar to those of apartments, but the situation changed as officetels were exploited in jeonse fraud, and affected by reverse jeonse, high interest rates, and falling house prices.

However, on the 10th of last month, the government relaxed regulations related to new officetels, such as balcony installation, in the 'Housing Supply Expansion and Construction Industry Support Measures,' and decided to support construction financing, raising expectations for resolving transaction stagnation. Additionally, a special provision excludes small new officetels (exclusive area 60㎡ or less, priced under 600 million KRW in the metropolitan area and under 300 million KRW in other regions) completed by December next year from the housing count for tax calculation when purchased for the first time.

Ham Young-jin, head of Zigbang Big Data Lab, said, "Officetel sales are expected to remain below average for the time being," but added, "Given the continued increase in 1-2 person households and household diversification during the boom period, and the possibility of a market phase shift where officetels are preferred again as quasi-housing during long-term housing booms or rental market price instability, it is necessary to closely monitor the price trends in the officetel market."

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