In Seoul's Gangnam area, non-apartment housing such as high-end urban lifestyle housing and officetels is emerging as a niche product. Developers are targeting the wealthy and gifting demand by highlighting that these homes face fewer restrictions on subscriptions, loans, and the land transaction permit system than apartments. However, some urban lifestyle housing can be subject to land transaction permits depending on the building type, so investors need to check the legal classification of each complex.
According to the real estate industry on the 28th, the high-end urban lifestyle housing PH1603 near Nambu Terminal in Seocho-dong, Seocho-gu, Seoul began sales on the 12th of this month. Built on the former Hyosung Seocho Villa site, the complex sits on a land area of 4,763.08㎡ and consists of one building with 5 floors underground and 16 above ground, totaling 124 homes. The asking price for a 59㎡ exclusive area is reportedly about 1.9 billion–2.4 billion won. The top floor also has a 127㎡ exclusive penthouse.
Giselle Lifegraphy Seocho in Seocho-dong is also a complex that bills itself as a premium residential officetel. Located around 1593-13 Seocho-dong, it has 6 floors underground and 22 above ground across two buildings, totaling 399 homes. Listings for 56㎡ exclusive units are reportedly asking in the 1.6 billion–1.9 billion won range.
Recently in the Gangnam area, similar high-end non-apartment residences have been supplied one after another. According to the industry, from 2017 to 2023, high-end residential facilities supplied in the Gangnam area reached 44 sites and 5,600 homes. One Edition Gangnam, an urban lifestyle housing project presented by Hyundai Engineering in Yeoksam-dong, Gangnam-gu, recorded a maximum competition ratio of 10.42 to 1 at the time of sales in 2021. Although the sales price for a 49㎡ exclusive unit was in the 1.5 billion–1.6 billion won range then, demand poured in for new small residential units in Gangnam.
The regulatory gap is behind the attention these products are receiving. The government's designation of land transaction permit zones mainly targets apartment transactions. To buy a permit-eligible apartment, a buyer must obtain approval from the district office and then actually reside there for a set period. In contrast, some non-apartment products such as officetels are excluded from the permit list, and marketers are leveraging the fact that asset operations such as jeonsei and monthly rental are relatively unrestricted.
Product composition is also changing. In the past, small residential facilities were considered short on community amenities compared with large apartment complexes. Recently, to make up for this, developers are promoting upscale facilities for a small pool of residents, such as sky lounges, rooftops, and private business lounges. The fact that buyers can purchase new residential units in the Gangnam area without a subscription savings account is also cited as a factor spurring demand from multi-home asset holders and for gifting to children.
Still, market conditions are not easy. With high interest rates persisting and fallout from a slump in the real estate project financing (PF) market, sales of high-priced residential products have slowed compared with the past. A real estate industry official said, "Consultations remain steady from wealthy clients seeking a first home for their children or a place for newlyweds, but with high sales prices, it's hard to expect a complete sellout in a short time as before."