Prices of mid-size and large officetels — studio or multi-room units used as either a home or an office — are climbing as apartment prices surge and jeonse listings, a Korean lease system requiring a large lump-sum deposit instead of monthly rent, grow scarce. Officetel resale prices, stagnant for years, have rebounded in recent months, with some complexes approaching their previous peaks. A strong housing market in areas benefiting from the semiconductor boom, combined with a tight rental market, is pushing demand toward relatively cheaper mid-size and large officetels.
Officetel resale prices in Gyeonggi Province for units between 60 and 85 square meters of exclusive floor area rose 0.12% in September from the previous month, marking 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 after earlier declines. Smaller units of 60 square meters or less remained weak. The gains are concentrated in mid-size and large officetels, which have layouts similar to apartments and can serve as a substitute for owner-occupied housing.
In major areas of southern Gyeonggi, prices are breaking out of a years-long plateau. An 84-square-meter unit at Gwanggyo Jiwell Lake in Suji District, Yongin, traded at 650 million won ($452,000) on the 8th. A unit of the same size and floor level sold for 490 million won in April, a 32.7% increase in about six months. It was the first time the price returned to the 600-million-won range since a 680-million-won sale in November 2021. Apartment prices in Yongin's Suji District have risen 15.92% so far this year, placing it among the top five in Gyeonggi alongside Dongtan District in Hwaseong, Yeongtong District in Suwon, Bundang District in Seongnam and Dongan District in Anyang.
Some in the market say the tight rental market is drawing purchase demand to officetels. A 140-square-meter unit at Hyundai Pantheon 1 in Sunae-dong, Bundang District, traded at 1.45 billion won on the 30th of last month. The same unit type sold for 1.2 billion won in May, a gain of 250 million won in about four months. A 93-square-meter unit also traded at 1.17 billion won on Aug. 17, its first sale above 1.1 billion won this year.
Demand from people seeking a place to live is rising in particular for three-bedroom mid-size and large officetels, which offer a residential environment similar to apartments. A broker near Hyundai Pantheon 1 said three-bedroom officetels now sell as soon as they are listed, with no inventory left and buyers waiting. "There are no jeonse listings, and nearby apartment prices have risen a lot, so demand is shifting to officetels," the broker said.
Instability in the apartment jeonse market is fueling purchase demand for mid-size and large officetels. Jeonse listings in Gyeonggi Province totaled 12,791 as of the same day, 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 apartment jeonse price index for Gyeonggi has risen 6.17% so far this year, the Korea Real Estate Board said the same day, about 6.9 times the 0.90% gain in the same period last year. The index for the greater Seoul area has risen 6.70% this year.
A similar pattern is emerging in Dongan District, Anyang. A 68-square-meter unit at Hillstate Pyeongchon Station The First changed hands at 613 million won on the 1st, topping 600 million won for the first time in about four years since September 2022. Prices had been flat for a long period before the recent rebound. At the nearby Pyeongchon The Sharp Central City apartment complex, a 59-square-meter unit traded at 1.31 billion won on the 13th, a record high. Officetel prices are now following apartments higher, narrowing the gap.
Roh Si-tae, a real estate specialist at KB Kookmin Bank, said instability in the rental market has driven the recent gains in mid-size and large officetel prices. "Jeonse listings are disappearing, and as jeonse shifts to monthly rent, monthly rents are rising as well, so purchase demand is moving into mid-size and large officetels, which function as a substitute for apartments, and prices are rising along with it," Roh said. "Southern Gyeonggi is also a residential area serving the semiconductor industry, so it is a highly preferred place to live, which sustains both rental and purchase demand."
