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Officetel transactions more than double in two weeks following Oct. 15 real estate measures

Published: 17 Nov. 2025, 15:00 Updated: 17 Nov. 2025, 17:32

Apartment complexes are seen in Jung District, central Seoul, on Nov. 14. [NEWS1]

Officetel transactions in Seoul more than doubled in the two weeks following the implementation of the Oct. 15 real estate measures. With tighter mortgage regulations making apartment purchases more difficult, demand has shifted to the less regulated officetel market.

According to data disclosed on Monday from the Ministry of Land, Infrastructure and Transport's real estate price tracker, 760 officetel units were traded in Seoul between Oct. 16 and Oct. 31. That figure is 2.6 times higher than the 289 transactions recorded from Oct. 1 to 15. Over the same period, apartment transactions in Seoul plummeted from 5,262 to 1,640, marking a 67 percent drop.

Experts say the surge in officetel transactions reflects a “balloon effect” caused by the government’s strict lending limits and mandatory occupancy requirements for apartment buyers. On Oct. 15, the government designated all of Seoul and 12 areas in Gyeonggi as regulated zones and land transaction permit areas, imposing stricter rules on property sales and requiring prior government approval for land transactions in designated areas.

Officetels, classified as quasi-residential properties under the Building Act, are exempt from the 600 million won ($411,000) cap on mortgage loans introduced under the June 27 real estate measures. They also benefit from a higher loan-to-value ratio — up to 70 percent — and are not subject to the debt service ratio regulations, which establish a ceiling on how much an individual can borrow by taking into account all outstanding debt.

Officetels are also free from the requirement to reside in the unit, allowing for gap investments, and are not subject to rules on savings accounts for apartment presale lotteries or funding source documentation. Moreover, purchasing an officetel does not affect one’s eligibility as a “homeless” individual, an important factor for many lottery applicants.

Apartment complexes are seen in Seoul on Nov. 13. [NEWS1]

Prices of purchasing officetels are also trending upward. The average sale price of officetels in Seoul reached 304 million won in October, the highest since January 2023, according to KB Financial Group's real estate price tracker. Rental yields also hit a seven-year high of 4.8 percent in October.

Some properties even saw record-breaking prices. On Oct. 30, a 137-square-meter (1,474.7-square-feet) unit in the Hyundai Hyperion officetel complex in Yangcheon District, western Seoul, sold for 2.97 billion won — an increase of over 200 million won in just four months. On Oct. 17, an 83-square-meter unit in the same complex sold for 1.63 billion won, also setting a record.

However, experts caution that officetels may not maintain their appeal: Apartments continue to dominate Korea's real estate market.

“In areas with strong housing demand, such as business districts or popular residential neighborhoods, officetels may serve as substitutes for apartments and see price gains,” said Lee Eun-hyung, a researcher at the Korea Research Institute for Construction Policy. “But it’s difficult to generalize this trend to all officetels.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY JEONG EUN-HYE [[email protected]]