Living-type accommodation refers to a mid- to long-term or short-term accommodation facility in which cooking and washing are possible. “Serviced Residence”, which we often refer to, is a living accommodation facility.
Living-type accommodation facilities are characterized by having residential functions such as cooking and laundry facilities in accommodation facilities such as hotels. The daily accommodation fee is 50,000~150,000 won, which is cheaper than regular hotels.
Life-style accommodations attracted investors’ attention because they could make a long-term lease contract like a residential officetel and earn money by operating as a lodging facility like a hotel or condominium, depending on the person’s choice. It is a residential type that combines the advantages of hotels and officetels.
The’Lotte Castle De Mer’, a super high-rise living accommodation facility in Busan Port, received a’night subscription’ for two consecutive days as subscription applications were crowded on March 17-18. ▶’Survival’ rather than a house as if it were a house
▷ Avoidance of real estate regulations applied to the’Building Law’
Most of the residences that appeared in the early 2000s were opened after converting officetels for business into lodging facilities. Then, in 2012, the residence business became legal by establishing a living accommodation system that includes residences in the existing tourism and general accommodation businesses. ‘Somerset Palace’ in Jongno-gu, Seoul and’Eulji-ro Co-op Residence’ in Jung-gu are representative examples of high returns in the range of 9-10% per year after repurposed as a living accommodation business.
It is also eye-catching that it is not regulated by the housing market. Living-type accommodations are subject to the Building Act, not the Housing Act. Regardless of the subscription passbook or subscription price, it can be received in pre-sale. Since it is not a house, resale of the right to sell is free.
It is not subject to the comprehensive real estate tax or capital gains tax. However, since individual registration is possible like an apartment, it is possible to freely trade and to target market profits. In particular, residential officetels acquired after August 12 last year began to be included in the number of houses, and living accommodations have emerged as a niche investment destination for profitable real estate.
Supply also increased in line with demand. According to statistics from the Ministry of Land, Infrastructure and Transport, the total number of accommodation facilities that received building permits in the country during last year was 2,330, up 16.9% from 1995 in 2019. Last year, the area of the building permit for accommodation facilities also increased by 26.3% from the same period of the previous year (2.76 million ㎡) to 3.486739㎡.
There is also quite a sense of demand for living-type accommodations. The’Beliv Paragraph Haeundae’ sold in Haeundae in Busan in June last year recorded a maximum competition rate of 266.83 to 1 and an average of 38.87 to 1. In Sihwa MTV Turtle Island, Siheung-si, Gyeonggi-do, where a large-scale artificial surfing site was built,’Siheung Wave Park Prugio City’, which was sold in November last year, recorded a maximum competition rate of 132.5 to 1 and an average of 26 to 1.
▶ Actively supplying’livestock’
▷Busan·Gangwon… Mostly sold to popular destinations
As life-style accommodations have become so popular, there are quite a few places that are starting to sell even this year. It is a popular area mainly for domestic travel.
In the Busan Haeundae Special Tourism Zone,’Bridge Centum’ officially opened a public relations booth on March 15 and began selling in earnest. Located at 1513, U-dong, Haeundae-gu, Busan, the complex consists of 6 floors below ground to 38 floors above ground, 346 exclusive 22-34㎡ living-type accommodation facilities and neighborhood living facilities.
British Centum is located a 4-minute walk from Centum City Station on Busan Subway Line 2. It is a location where you can see the sea of Busan, Gwangan Bridge, and Suyeong Bay. There are also cultural and shopping facilities such as BEXCO, Cinema Center, and Shinsegae Department Store in the vicinity. There will be a rooftop and infinity pool on the upper part of the complex where you can relax while looking at the sea. Various communities such as business lounges, fitness, and book cafes in the complex will also be created. In addition, it plans to provide a concierge service that can only be enjoyed at the hotel, such as room clean service, valet parking service, and breakfast service.
In March, Lotte E&C started to sell’Lotte Castle Demer’ in the D-3 block of the Busan Port redevelopment project in Choryang-dong, Dong-gu, Busan. It is composed of 1221 rooms, with 5 floors below ground and 59 floors above ground, and 2 buildings with 45-335m2 exclusive living accommodation facilities. By flat type ▲45㎡A 42 rooms ▲45㎡B 54 rooms ▲46㎡A 400 rooms ▲46㎡B 12 rooms ▲46㎡B-1 1 room ▲71㎡A 103 rooms ▲71㎡B 105 rooms ▲90㎡ A 205 rooms ▲90㎡A-1 54 rooms ▲90㎡B 126 rooms ▲91㎡ 105 rooms ▲314㎡ 7 rooms ▲335㎡ 7 rooms are provided.
In addition to a swimming pool exclusively for lodging guests, Lotte Castle De Mer will be equipped with a variety of convenience facilities such as a book cafe, club lounge, fitness, golf practice range, dining room, and kids room. Accommodation customers can view the Busan sea from the 51st floor community facility. In addition to concierge service, various home care services such as breakfast service, home laundry, home planting, housekeeping, and babysitting services will be provided.
The move-in date of Lotte Castle De Mer is August 2025. Subscriptions were accepted from March 17 to 18, but it is desirable to aim for the remaining volume after the party signing on the 23 to 27.
In the C8-5 block (845-5, Seonggok-dong), Bandal Island, Danwon-gu, Ansan-si, Gyeonggi-do,’Marina Island’, a living accommodation facility, is on sale. It has a total of 451 rooms from 1 basement to 28 floors above ground and consists of 17 to 45 m2 for exclusive use. All rooms have balconies and some rooms have terraces, so you can feel like a’your own seaside resort’. Community facilities such as fitness and sauna are built on the 9th floor, and a rooftop garden is built on the roof.
In Gangwon-do, 76% of the total floor area of accommodation facilities built in the last three years (2017-2020) is living-type accommodations, so supply is active. This is compared to that of living accommodations accounting for 63.45% of the nationwide supply of accommodation facilities at the same time. Most of the living accommodation facilities that started construction last year were located in Yeongdong areas such as Sokcho and Yangyang. Construction of 717 rooms in’Cacia Sokcho’ in Daepo-dong, Sokcho-si started in January of last year, and 570 rooms of’I-Park Suite’ in Yeongrang-dong, Sokcho in July last year. ‘Ocean Stay Yangyang’, which has 462 rooms in Hyeonnam-myeon, Yangyang, started construction in March last year. In addition, in Chuncheon, construction of’Chuncheon Bella City’ in Joyang-dong started in March last year, and 176 rooms are expected to be built.
▶From April, only’lodging business’ is possible
▷For more than 30 rooms, it is mandatory to register for accommodation business.
Living-style accommodation is considered a niche product for multi-home investors to avoid regulation of the housing market, but there are few things to be aware of.
This is because the government is scheduled to begin regulation on living accommodation facilities in earnest from April. The government’s amendment to the Building Act, which takes effect in April, contained content that prohibits the use of living accommodation facilities for housing purposes.
Previously, living accommodation facilities were not only available in the lodging business, but could be used only as a lodging business when the revised bill is implemented. In particular, living-type accommodation facilities with 30 or more rooms or a business area of more than one-third of the total floor area of the building must be registered as a lodging business. The Ministry of Land, Infrastructure and Transport announced that it would impose a compulsory performance fee on facilities already used for housing purposes. There is a controversy over the retrospective application of regulations to living accommodation facilities that have already been sold, which can act as a variable.
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