Officetel Prices Rise as Seoul’s Large and Mid-Large Units Gain on Apartment Substitution Demand

Apartment affordability pressure is now spilling into the officetel market. Sale prices rose from the previous quarter in both the Seoul metropolitan area and Seoul, with large and mid-large units leading the move as apartment alternatives. Units with more usable space, stronger residential layouts and convenient locations are drawing both end-user and investment demand.

Apartment alternative demand is lifting prices

The entry barrier to Seoul apartments remains high. Purchase prices, lending rules, ownership costs and intense competition have pushed some buyers toward officetels. Once viewed mainly as rental-income assets, larger residential-style officetels are increasingly treated as practical housing options when they offer multiple rooms, transit access and newer facilities.

The key feature of the current market is not a broad rebound but clear polarization by size. Studio-type and ultra-small officetels remain sensitive to rental yields and vacancy risks. Larger units are supported by space, scarcity and their ability to substitute for apartments.

Large Seoul units rose 2.15%

Officetel sale prices rose 0.07% in the capital region and 0.39% in Seoul from the previous quarter. Within Seoul, performance diverged sharply by size. Large officetels gained 2.15%, while mid-large units rose 1.06%. Small units fell 0.24% and ultra-small units declined 0.43%. The stronger the housing-substitution value, the better the price resilience.

The average sale price of an officetel in Seoul was 308.72 million won. That remains a lower entry point than typical apartment purchases, but large and mid-large units can feel expensive quickly because supply is limited in preferred locations. Buyers need to review maintenance fees, usable-area ratios, parking, loan eligibility and tax treatment.

Buyers need to focus on location and product quality

This trend does not mean every officetel is strengthening. Demand is concentrated in Seoul units that can clearly replace apartment living. If apartment prices remain burdensome and lease-market uncertainty persists, residential-style officetels may keep attracting interest. Still, interest-rate pressure, weaker rental yields and vacancy risks in older buildings can limit further gains.

End-users should prioritize livability and resale liquidity over short-term price gains. Transit access, job-center proximity, local amenities, actual usable space and monthly management costs matter. For small and ultra-small units, rental-demand quality and vacancy risk require a more conservative review.