The First Baby Is Born in Busan's Youth Rental 'Dream Apartment'

Busan Yeso Construction Begins Construction of Youth Rental Housing 'Dure Raum' Near Yeonsan Subway Station
Exclusive Area 50㎡ · 276 Units ... Move-in Scheduled for Second Half of 2022

Perspective view of Dureaum Dream Apartment, the first youth rental apartment in the Busan area.

[Asia Economy Yeongnam Reporting Headquarters Reporter Kim Yong-woo] The first ‘youth rental housing’ built by a construction company in the Busan area is coming into existence.

The so-called ‘Dream Apartment,’ a rental housing for youth and newlyweds, is scheduled to be built near Yeonsan Station on Busan Subway Line 1.

Located in a transportation hub and a relatively expensive downtown area, Busan’s first Dream Apartment will take root.

Yesuh Construction, a mid-sized construction company headquartered in Nam-gu, Busan, announced on the 6th that it will build ‘Dureaum’ youth rental housing with 276 units in the area of 1244-1 Yeonsan-dong, Yeonje-gu (plus 2 other parcels).

Each housing unit has a net floor area of 50㎡, approximately 22 pyeong, with 2 bedrooms and 1 living room. The monthly rent with a deposit of 20 million KRW is 650,000 KRW, and if rented as a full jeonse (lump-sum deposit lease), it costs about 190 million KRW.

The monthly rent can be replaced by a jeonse deposit through loans with low interest rates of 1-2% under youth housing policies, making it very attractive to ‘youth.’ Another appealing advantage is that residents can purchase the unit after living there for more than 8 years.

Demolition of the existing site began in early May, and construction started earlier this month. The recruitment of tenants will begin between June and July, with move-in scheduled for the second half of 2022, according to the construction company.

The youth rental housing Dream Apartment is a project that Busan City is focusing on to expand public rental housing supply.

The city offers benefits to construction companies, such as increased floor area ratio and slightly relaxed building height restrictions, on the condition that the property is rented for more than 8 years in a station-area commercial zone. In return, the rent must be kept below 80% of the surrounding market price.

Many projects have struggled to even start construction due to difficulties in securing construction funds despite having permits. Yesuh Construction is the first local company to receive a guarantee from the Housing and Urban Guarantee Corporation (HUG) for rental housing construction.

With this first step opened, it is expected that Dream Apartment projects will gain momentum through HUG guarantees and proceed to construction.

Ha Jong-gon, CEO of Yesuh Construction, the ‘birth mother’ of Busan’s first Dream Apartment, said, “If you use the jeonse loan product through the collective guarantee of the Korea Housing Finance Corporation (HF), rental costs can be set much lower than 80% of the surrounding market price.” He added, “By starting the Dream Apartment construction for the first time, we have paved the way for the supply of affordable rental housing that helps young generations settle in the region.”

The Dream Apartment project is not a golden egg-laying business for construction companies immediately. This is because land prices in downtown station-area commercial zones are high, and rental profits are limited. The construction company’s profit structure depends on successfully selling the units after waiting for the 8-year rental period to end.

Established in 1999, Yesuh Construction has mainly handled public construction projects such as Saha National Sports Center and Suyeong Tax Office. It has also carried out various housing projects, including supplying 126 units of ‘Yesuh The Together’ apartments in Gwang-an-dong, Suyeong-gu in 2015, and over 500 rental apartments near Gamjeon Station (Gamjeon-dong) and Sasang Station (Gwaebeop-dong) on Subway Line 2. CEO Ha Jong-gon serves as the vice president of the Busan branch of the Korea Construction Association.