After Bundling Apartments... Unrestrained Non-Apartment Housing Subscription

Avoiding Double and Triple Apartment Regulations
Life-Style Lodgings and Officetels Free from Resale and Loan Restrictions Show 'Balloon Effect'
Investment Demand Surges at Busan Bukhang 'Lotte Castle De Mer', Signs of Overheating in Subscription

Lotte Castle De Mer Rendering

[Asia Economy Reporter Ryu Tae-min] The investment atmosphere for non-apartment products is becoming quite noticeable. With low interest rates flooding the market with idle funds, and the government imposing multiple layers of regulations on apartments, a balloon effect is spreading where investors are flocking to similar housing products such as residential lodging facilities and residential officetels.

According to the industry on the 17th, applicants have been pouring in since the morning for the residential lodging facility "Lotte Castle De Mer" in Choryang-dong, Busan, which is holding its subscription on the day. Previously, Lotte Castle De Mer's website server temporarily went down due to a surge of people making advance reservations to visit the model exhibition hall.

A sales official said, "Since the opening, not only website visits but also inquiries about subscription methods and eligibility requirements have been pouring in, showing very high interest from demanders," adding, "Especially with ocean view rights and the growing future value of the Bukhang redevelopment, interest from residents not only in Busan but also in Seoul and other metropolitan areas continues unabated."

This complex, located in the D-3 block of the Busan Bukhang redevelopment zone, is a super high-rise mixed-use building with 2 towers ranging from 5 basement floors to 59 above-ground floors. Notably, the residential product is supplied as a residential lodging facility rather than an apartment. It consists of a total of 1,221 units ranging from 45 to 335㎡ (exclusive area). Except for some penthouses, most units are small to medium-sized. By detailed type, there are △45㎡A 42 units, △45㎡B 54 units, △46㎡A 400 units, △46㎡B 12 units, △71㎡A 103 units, △71㎡B 105 units, △90㎡A 205 units, △90㎡B 126 units, △91㎡ 105 units, △314㎡ 7 units, and △335㎡ 7 units.

The influx of demand appears to reflect expectations for the country's first port redevelopment project. Currently, the Bukhang redevelopment is in its second phase and is attracting attention as a linked development including the port, railway, and even the old downtown area.

Experts point out that the recent intensified apartment regulations have made non-regulated products more attractive to investors, which is another reason for their popularity. Residential lodging facilities are subject to the Building Act rather than the Housing Act, allowing subscriptions regardless of subscription savings accounts or subscription point scores. There are no restrictions on resale of pre-sale rights, and they are exempt from comprehensive real estate tax and capital gains tax surcharges. Since individual registration is possible, free trading is allowed, and capital gains can be expected. Loan regulations do not apply either.

Yoon Ji-hae, senior researcher at Real Estate 114, said, "Unlike before, the number of mid-sized officetels with two or three rooms is increasing, leading to more demand as an alternative to apartments," adding, "Recently, large officetel complexes with over 1,000 households equipped with sufficient community facilities have emerged, targeting niche markets."

Seo Jin-hyung, professor at Gyeongin Women's University and president of the Korean Real Estate Society, said, "As apartment prices in Seoul and the metropolitan area have risen too much recently, demand has concentrated on residential officetels as a balloon effect," adding, "They are popular among younger generations because they can enter the subscription market without difficulty while avoiding strict apartment loan regulations."

This content was produced with the assistance of AI translation services.