Bought with Yeongkkeul but hit by registration and loan bans... Warning on niche real estate products

Townhouses, Urban-Type Residential Housing, and Residential Lodging Facilities
No Need for Subscription Savings Account, Lower Regulatory Barriers Compared to Apartments
Liquidity and Living Environment Issues... Some Buyers File "Fraud" Lawsuits

As the government’s real estate regulations focus on apartments, ‘niche products’ with relatively lower regulatory barriers, such as residential-type lodging facilities, urban-style residential housing, and townhouses, are gaining popularity. However, these products may have differences in living environments compared to apartments and often suffer from lower liquidity, requiring cautious consideration from buyers. Recently, some buyers have also suffered damages due to exaggerated advertising during the sales process of certain products.

According to the real estate industry on the 29th, as the government tightens regulations on sales, loans, and taxes related to real estate, a balloon effect is occurring where demand is shifting to alternative products other than apartments.

Residential-type lodging facilities are a representative example. With the prolonged COVID-19 pandemic, domestic tourist destinations have gained attention, and vaccination rates have increased, highlighting these facilities as alternative investment options. Built in commercial areas and commonly called ‘residences,’ residential-type lodging facilities offer hotel-style concierge services similar to typical hotels (tourist lodging facilities), but they allow indoor cooking and laundry, making them usable as apartment-like residential facilities. From an investment perspective, they are exempt from acquisition tax surcharges and holding tax burdens, and unlike apartments, resale is possible after purchase.

Urban-style residential housing is also popular. Since it is classified as housing, features like bathtubs and balconies can be installed just like in apartments. The average exclusive use ratio is around 70-80%, which is larger than officetels (50-60%), providing more usable space. Recently constructed urban-style residential housing is equipped with community facilities and landscaping comparable to apartments.

COVID-19 has also increased the popularity of townhouses, which had previously received little attention. The spread of remote work has heightened demand for comfortable living environments with terraces and gardens. Recently, complexes with enhanced security and surveillance systems have been introduced one after another, increasing interest among younger generations.

However, experts advise that these niche products still have drawbacks in terms of living conditions and investment value. For example, residential-type lodging facilities cannot have balcony extensions and are not classified as housing, so acquisition tax is high at 4.6%, similar to officetels. Although they are not counted as owned housing, if the owner resides or the tenant registers their residence, they are recognized as housing. It is essential to check the burden of comprehensive real estate tax and capital gains tax. Urban-style residential housing is generally considered vulnerable to noise between floors due to many exceptions in noise protection standards and parking lot layout regulations.

In the case of townhouses, special caution is needed as individual registration may not be possible. Recently, the prospective residents’ representative council of a townhouse in Uiwang-si, Gyeonggi Province, filed a lawsuit against developer A for exaggerated advertising. The developer claimed in sales advertisements that ‘100% of the interim payment loan would be approved and it would not be counted as housing,’ but the actual contract terms differed. A council representative said, "We signed the contract with the hope of spending relaxing time with our children in the yard, but registration is not possible, and interim payment loans are difficult to obtain," adding, "I feel like I was scammed and have lost sleep over it."

Ko Jun-seok, an adjunct professor at Dongguk University Law School, said, "It is important to note that townhouses and officetels have lower liquidity compared to apartments." He added, "Since urban-style residential housing is mainly for one- to two-person households, if the number of residents increases, living conditions may become inconvenient," and emphasized, "One should approach niche products carefully, considering both living environment and investment pros and cons."

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