Prices of mid- to large-size officetels — studio-style units used as either homes or offices — are climbing in southern Gyeonggi Province, where a semiconductor boom has already driven apartment prices sharply higher. Some complexes have broken out of years of flat prices and are closing in on their previous peaks. With jeonse deposits soaring and listings scarce, pushing apartment sale prices up steeply, demand is shifting to mid- to large-size officetels, which are cheaper and can serve as substitutes for apartments.
Officetel sale prices in Gyeonggi Province rose 0.12% in September from the previous month for units larger than 60 square meters and up to 85 square meters, a fourth straight monthly gain, according to the Korea Real Estate Board on the 22nd. Units larger than 85 square meters rose 0.16% in September, turning higher. Smaller units of 60 square meters or less remained weak. The gains are concentrated in mid- to large-size officetels, which have layouts similar to apartments and can serve as substitutes for apartments for buyers who intend to live in them.
Major areas in southern Gyeonggi are breaking out of a yearslong price plateau. An 84-square-meter unit at Gwanggyo Jiwell Lake in the Suji district of Yongin sold for 650 million won ($454,000) on the 8th of this month. A unit of the same size on the same floor level traded at 490 million won in April, a 32.7% increase in about six months. It was the first time the price recovered to the 600-million-won range since a 680-million-won sale in November 2021. Apartment sale prices in Yongin's Suji district have risen 15.92% so far this year, ranking among the top five in Gyeonggi Province along with the Dongtan area of Hwaseong, Yeongtong in Suwon, Bundang in Seongnam and Dongan in Anyang.
Brokers on the ground say the rental squeeze is also drawing purchase demand to officetels. A 140-square-meter unit at Hyundai Pantheon 1 in Sunae-dong, Bundang, sold for 1.45 billion won on the 30th of last month. The same unit type traded at 1.2 billion won in May, a gain of 250 million won in about four months. A 93-square-meter unit sold for 1.17 billion won on Aug. 17, reaching the 1.1-billion-won range for the first time this year.
Owner-occupier demand is rising in particular for three-bedroom mid- to large-size officetels, which offer a living environment similar to apartments. A broker near Hyundai Pantheon 1 said three-bedroom officetels now sell immediately and that there are no listings left, leaving buyers waiting. The broker added that with no jeonse listings available and nearby apartment prices up sharply, demand is turning to officetels.
A similar trend is emerging in the Dongan district of Anyang. A 68-square-meter unit at Hillstate Pyeongchon Station The First changed hands for 613 million won on the 1st of this month, topping the 600-million-won range for the first time in about four years, since September 2022. Prices had been stagnant for a long period before rebounding recently. At the nearby Pyeongchon The Sharp Central City apartment complex, a 59-square-meter unit sold for 1.31 billion won on the 13th of this month, a record high. Officetel sale prices have been following apartments higher, narrowing the gap.
Instability in the apartment jeonse market is fueling purchase demand for mid- to large-size officetels. Jeonse listings in Gyeonggi Province totaled 12,791 as of the 22nd, down 38.7% from 20,874 a year earlier, according to real estate data platform Asil. Compared with 30,147 two years ago, listings have fallen 57.6%. The jeonse price index for Gyeonggi apartments has risen 6.17% so far this year, according to the Korea Real Estate Board, about 6.9 times the 0.90% gain in the same period last year. The greater Seoul area has also risen 6.70% so far this year, extending the uptrend.
Roh Si-tae, a real estate specialist at KB Kookmin Bank, said instability in the rental market has contributed to the recent rise in mid- to large-size officetel prices. He said jeonse listings have disappeared and monthly rents have risen as jeonse shifts to monthly rent, bringing purchase demand into mid- to large-size officetels that function largely as apartment substitutes and lifting their prices. He added that southern Gyeonggi, which serves as a residential base for the semiconductor industry, is a highly sought-after area, sustaining both rental and purchase demand.