Donghae New Port, Large-Scale Development Projects Including Hanseom Sensory Coastal Road, Improved Seoul Accessibility via KTX, and Busan-Gangneung Electrification Scheduled for Completion in 2022
Living accommodation facilities with development prospects are emerging as a new investment destination in the real estate market. While transactions of existing apartments and officetels have dominated, demand is shifting to living accommodation facilities, which are relatively less regulated.
According to the Korea Real Estate Board, nationwide apartment transactions dropped to 124,211 cases over the two months of September and October, about half of the 205,110 cases recorded in June and July. Residential officetels also declined following the amendment of the Local Tax Act implemented in August, which included them in the housing count for acquisition tax calculations. The numbers sequentially fell from 18,992 cases in July to 13,027 in August, 12,106 in September, and 10,924 in October.
On the other hand, living accommodation facilities, classified as non-regulated products, are emerging as a new investment option. Since they are categorized as lodging facilities under the Building Act rather than the Housing Act, the one household two houses regulation does not apply. They are free from various regulations such as taxes, loans, and subscription restrictions, leading to an influx of idle funds into living accommodation facilities.
Experts say, “As residential officetels are also restricted, investors who have lost their way are flocking to living accommodation facilities,” adding, “Especially living accommodation facilities with abundant development prospects are highly preferred because they can secure stable rental demand as well as capital gains.”
In Cheongok-dong, Donghae City, which is rich in development prospects, the living accommodation facility ‘Donghae Cheongok Pine&U Ocean City’ is attracting attention from buyers due to its excellent profitability. Donghae Cheongok Pine&U Ocean City is located in a representative tourist area of the East Coast and offers both stable rental demand and potential capital gains thanks to various development projects.
First, it boasts large-scale development projects such as the Donghae New Port project and the Hanseom Emotional Coastal Road project. The Donghae New Port project is scheduled for completion next year and is expected to create over 8,000 jobs and generate an induced production effect exceeding 680 billion KRW. There is also the Samcheok Thermal Power Plant, scheduled for completion in 2024. With a project cost exceeding 5 trillion KRW, it is four times the scale of the Donghae GS Thermal Power Plant and is expected to create about 1,200 jobs upon completion.
Moreover, Donghae and Samcheok have recently seen a surge in tourists enjoying golf sports, resulting in a shortage of lodging facilities in the area. Therefore, investors’ interest in Donghae Cheongok Pine&U Ocean City, which offers not only accommodation but also cooking facilities, is growing. This is because there are no special lodging facilities nearby except for Daemyung Sol Beach located in nearby Samcheok.
Additionally, with improved regional transportation conditions, local infrastructure is expected to improve further, and tourist demand is anticipated to increase exponentially. The KTX Donghae Station has opened, allowing travel from Seoul Station to Donghae Station in about an hour, and the electrification of the Donghae Line between Busan and Gangneung is scheduled for completion in 2022.
- Immediate income generation upon move-in in March next year... Pre-rental reservation and matching service available
Meanwhile, Donghae Cheongok Pine&U Ocean City, which has a fast move-in schedule, differs from other income-generating real estate that takes time to occupy, shortening the investment recovery period. Furthermore, it offers a guaranteed fixed income system, allowing investors to expect stable returns, increasing its preference among buyers.
As a living accommodation facility, it is not subject to the one household two houses heavy taxation and is exempt from comprehensive real estate tax. Individual registration and resale are also possible. In particular, with pre-rental reservation and matching services, contract holders can enjoy monthly rental income immediately upon signing the contract. Since tenants are secured first, the contract holder is guaranteed immediate rental income.
It also boasts excellent living infrastructure. Cheongok Pine&U Ocean City is located in Cheongok-dong, one of Donghae City’s most highly rated residential areas. It is convenient to use the KTX Donghae Station, which opened this year, and there are many shopping and cultural facilities such as E-Mart and Lotte Cinema within a five-minute walk. Additionally, Hanseom Coastal Road, walking trails, and Hanseom Beach are within a five-minute walk, allowing residents to enjoy a healing trend. There are many public offices nearby, including Donghae City Hall, police station, post office, and banks, and above all, residents can enjoy the natural environment of Donghae Sea, Naengcheon Park, and Borim Mountain.
The product quality is also excellent. Most units come fully furnished, and products are categorized by floor for monthly rental or consignment operation, allowing contract holders to choose according to their circumstances. The variety of layouts (varying by type) includes studio, 1.5-room, two-room, duplex, and terrace types, broadening the range of choices.
The top floor of the complex features a sky lounge and fitness center where residents can enjoy leisure time while overlooking the beautiful Donghae Sea. Floors 1 and 2 are used as parking lots, and neighborhood living facilities are provided to enhance residents’ convenience. Various auxiliary facilities such as a golf practice range, billiard room, pocket billiards room, rooftop garden, and coin laundry are also available.
The showroom is located at 824-1 Cheongok-dong, Donghae City, Gangwon Province, and move-in is scheduled for March 2021.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
