[Asia Economy Reporter Yoo In-ho] Amid the deepening jeonse crisis, public-supported private rental apartments are being supplied in Seoul, attracting attention.
Public-supported private rental apartments offer a maximum lease period of up to 8 years, longer than the maximum 4 years of jeonse, and their rent is cheaper than the surrounding market prices, emerging as an alternative amid the jeonse crisis.
HDC Hyundai Development Company opened the model house for the public-supported private rental housing "Gocheok I-Park," supplied through the development of the site at 100-7 Gocheok-dong, Guro-gu, Seoul, on the 27th, and began full-scale sales. Subscription applications will be accepted for two days from the 30th to the 1st of next month. The supply method is divided into special supply 20% (447 households), priority supply 20% (441 households), and general supply 60% (1,317 households).
Gocheok I-Park is a large-scale branded complex in the city center, consisting of a total of 2,205 households with exclusive areas of 64 and 79㎡ in buildings up to 45 floors high on the site at 100-7 Gocheok-dong, expected to attract high demand.
"Gocheok I-Park" consists of a mixed-use complex with six buildings up to 45 floors and an apartment complex with five buildings up to 35 floors.
In particular, the complex is part of a large-scale mixed development project that includes an administrative town (planned) housing the Gocheok-dong Community Center and Guro Tax Office, as well as parks and shopping malls (planned), and is expected to become a landmark complex representing the southwestern region of Seoul in the future.
As a large-scale branded complex located in the city center, it also boasts excellent transportation networks. The complex is a station-area complex located within 500 meters of Gaebong Station on Line 1, making it convenient to move around downtown Seoul, and it is easy to use Gyeongin-ro and Seobu Expressway, which extend in front of the complex.
The complex lowers housing burdens as a public-supported private rental apartment. First, "Gocheok I-Park" guarantees rent for 8 years without moving worries. Upon renewal after 2 years of residence, the rent increase rate is limited to within 5%, reducing housing cost burdens. Also, when applying for subscription, the subscription savings account is not required, and re-winning restrictions do not apply.
Especially, the general subscription sets a reasonable initial rent at 95% or less compared to nearby market prices, and special supply subscriptions (for youth, newlyweds, elderly) are set at 85% or less. Tax deduction benefits (up to 7.5 million KRW) are also provided for householders without home ownership.
As HDC Hyundai Development Company participates as the construction company, specialized residential services by HDC Hyundai Development Company are also provided. These include kitchen range hood cleaning and mattress sterilization services per household, concierge services such as home appliance and water purifier rentals, and various lifestyle convenience services such as laundry and moving assistance.
Interest in public-supported private rentals is increasing due to the jeonse crisis, as seen with Gocheok I-Park. The advantages include stable residence for up to 8 years and rent increases limited to within 5% annually. Additionally, the subscription threshold is lower than that of public rental housing, and as it is a private branded apartment, it is less rejected by the middle class, which is also cited as a factor for its popularity.
By the end of the year, 4,654 public-supported private rental apartment units will be supplied in three complexes in the metropolitan area. Following Gocheok I-Park's 2,205 households, Daewoo Engineering & Construction will introduce "Unseo Station Prugio The Sky" with 1,445 households in Yeongjong Sky City, Incheon, and Hyundai Construction will present "Hillstate Bongdam" with 1,004 households in Bongdam, Hwaseong, Gyeonggi-do.
Daewoo Engineering & Construction opened the model house for Unseo Station Prugio The Sky on the 27th and began recruiting tenants.
"Unseo Station Prugio The Sky" is supplied with 1,445 households in 17 apartment buildings ranging from basement 2 floors to ground 25 floors at 1778 Unnam-dong, Jung-gu, Incheon (Yeongjong Sky City A12 block). It consists of small to medium-sized units preferred by actual users, with exclusive areas ranging from 62 to 84㎡, which is rare in rental apartments. Move-in is scheduled for August 2021.
From the 2nd to the 3rd of next month, special supply and general supply tenant recruitment will be conducted. After the announcement of winners on the 9th, contracts will proceed from the 14th to the 20th.
Previously, the "KTX Osong Station Daekwang Roseviang" private rental supplied in Cheongju, Chungcheongbuk-do, in September showed a competition rate of 69 to 1 despite being a local apartment. The "Shin Asan Moa Elga Vista Phase 1" supplied this month in Asan, Chungnam, also reached a competition rate of 48.5 to 1. The "Suncheon Daekwang Roseviang River Palace" supplied in Suncheon, Jeonnam, recorded an average competition rate of 94.3 to 1 in subscriptions, even though the subscription eligibility was restricted to residents of nearby areas.
In line with the purpose of rental housing for the middle class, the areas are also larger than public rental housing. Gocheok I-Park consists of 64 to 79㎡ (exclusive area), and Unseo Station Prugio The Sky and Hillstate Bongdam consist of 62 to 84㎡ respectively.
Most public rental housing is supplied at 60㎡. The fact that these are newly built apartments is also a merit. This contrasts with the government's recent jeonse measures, where most of the supply is purchase rental housing consisting of multi-family and row houses and remodeling of hotels, commercial buildings, and offices.
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