"Wiggle" to cut the benchmark interest rate...Is there a warm breeze in the officetel market?

Officetel in Mapo-gu, Seoul, was reported last month,

Interest in officetels for 'apartment substitution' growing in loan regulations

Improvement of investment environment with government measures to revitalize non-apartments

S. Korea's key rate cuts boost investment demand

[Anchor]
It is an officetel market that was cold due to high interest rates in the aftermath of the jeonse fraud, and more and more people are looking for officetels these days.

It seems that demand for officetel investment has begun to flow in due to soaring housing prices and the Bank of Korea's cut in the benchmark interest rate.

Reporter Choi Doo-hee is back.

[Reporter]
an officetel in Mapo-gu, Seoul

Last month, 31㎡ of exclusive area was traded at 360 million won, marking a new price.

Other officetels in the same area also set a new price with a dedicated area of 36㎡ traded at 235 million won.

Interest in officetels, which are considered an alternative to apartments, seems to be gradually increasing as the government's loan regulations and fatigue over soaring apartment prices continue.

[Real estate agent near Mapo-gu, Seoul: Due to stricter apartment regulations, officetels have also seen a slight increase in prices recently. These days, at the end of the contract period, we raise (monthly rent) by 6-7% and almost 10% or more....]

The officetel market, which had been in a slump last month, has recently been recovering, with 15% of officetels traded in Seoul selling at high prices.

In the third quarter, the sale price of officetels in Seoul shifted upward, and on a monthly basis, it has fallen for 23 consecutive months since August 2022 and has risen for 2 consecutive months after turning flat in July.

The officetel market is shaking like this because the government's plan to revitalize non-apartments in August improved the investment environment for officetels.

In addition, as the Bank of Korea recently cut its benchmark interest rate, demand for investment in rate-sensitive officetels is also increasing.

[Kim Eun-sun / Jikbang Big Data Lab Lead: officetels have more considerations for rental income than profit-taking, and expectations are that their profits will improve due to lower interest rates and higher monthly rent prices....]

In fact, the average return on officetels nationwide has been on the rise for 30 consecutive months since March 2022.

However, there are many cautious opinions that the future trend should be watched more as to whether the officetel market recovers.

Experts advise that if you invest in officetels, you should carefully examine whether there is stable rental demand and pay attention to the fact that high sales prices can lead to lower returns.

I'm Choi Doohee of YTN.

Reporter for filming
: Lee Dong-gyu
Design: Woo Hee-seok