The Bank of Korea has raised the base interest rate four consecutive times for the first time in history.
On the 25th, the Bank of Korea held a Monetary Policy Committee meeting at the Bank of Korea in Jung-gu, Seoul, and decided to raise the current base interest rate of 2.25% per annum by 0.25 percentage points. Accordingly, the base interest rate was raised to 2.50%.
This interest rate hike follows previous increases of 0.25 percentage points in April and May, and a 0.5 percentage point (big step) increase last month. Raising the base interest rate four times in a row is unprecedented in the history of the Bank of Korea. In particular, financial market experts predict that additional rate hikes may continue until the end of the year, which is expected to increase the loan interest burden on financial consumers.
Given this situation, complexes offering interest-free interim payments are receiving strong responses from buyers in the housing market. In these complexes, where construction companies or developers bear the interest on behalf of the buyers, the actual interest that the contract holders must pay is zero. Therefore, during periods of rising base interest rates like now, buyers face no burden and can establish stable financial plans.
An expert related to the matter advised, “During periods of interest rate hikes, it is advisable to consider investing mainly in real estate offering interest-free interim payment benefits,” adding, “Looking at the recent trend of the Bank of Korea’s base interest rate, a two-year cycle can be observed, so finding a smart commercial property that can be occupied after two years would be a good investment strategy.”
Meanwhile, a new commercial facility offering interest-free interim payment benefits has been introduced in the Taepyeong-ro area, which has emerged as a key commercial district in Daegu.
Hyundai Engineering is currently selling the landmark commercial facility ‘Hills Avenue Dongin’ in the Dongin-dong area of Jung-gu, Daegu. This commercial facility is located within the ‘Hillstate Dongin’ large-scale residential-commercial complex, which will be built up to 49 floors high. It attracts attention as a commercial space with a solid fixed demand from residents as well as abundant floating population centered around Taepyeong-ro.
‘Hills Avenue Dongin’ is receiving great responses from investors due to its reasonable sale price and high exclusive use ratio (58% exclusive use ratio on the first floor). Additionally, with the interest-free interim payment benefit provided, it offers the advantage of entering Daegu’s core commercial district with relatively low initial costs.
‘Hills Avenue Dongin’ has a solid underlying demand, which is key to commercial investment. It has a fixed demand from residents of ‘Hillstate Dongin,’ consisting of 1,009 households (941 apartments and 68 residential officetels). Furthermore, nearby redevelopment projects such as the under-construction ‘Hillstate Dongin Central’ and ‘Central Daewon Cantavil’ are continuously planned, and it is expected to absorb demand from residents of a large-scale residential town in the future.
The location conditions are also excellent. It is situated in the core area of Taepyeong-ro, considered Daegu’s largest downtown, and is located at the corner of ‘Dongin Intersection,’ which provides easy access to Daegu Subway Line 1’s Chilseong Market Station, Jungangno Station, and Daegu Station.
In particular, many major commercial facilities with high visitor traffic are located nearby, including Lotte Department Store Daegu Branch, Dongseong-ro Rodeo Street, Gyodong Jewelry Street, Daegu Chilseong Furniture Street, Chilseong General Market, and Kyungpook National University Hospital, which are expected to naturally attract floating population aiming to use these facilities.
Also, the site behind Daegu City Hall, located right in front of the complex, is known to be transformed into a 65-story mixed-use facility representing Daegu, raising expectations that this area will be reborn as a core commercial district symbolizing Daegu.
Another advantage is that it is developed as a branded commercial space under the highly preferred Hillstate brand. With Hyundai Engineering as the constructor, stability and brand premium can be expected. Moreover, ‘Hills Avenue Dongin’ plans to attract floating population through Hyundai Engineering’s specialized design.
‘Hills Avenue Dongin,’ which significantly reduces buyers’ burden from interest rate hikes by offering interest-free interim payment benefits, consists of a large-scale neighborhood living facility with a total floor area of approximately 11,556㎡ from basement level 1 to the 2nd floor above ground. It will initially sell 110 units (planned) on the 1st and 2nd floors above ground, excluding the basement, with the expected move-in date in May 2025.
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