하나은행 하나금융연구소

The government introduces "Urban Dwelling Housing" for the people's residential stabilization

An increase in divorce, late marriage and less marriage resulting from aging society and a change in value of marriage and family dissolution resulting from economic deprivation have continuously affect an increase in small families with one or two members.
Meanwhile, in the process of redevelopment and reconstruction, a large number of houses have been lost and more people have also moved around.
Since those people have relatively low income and small-sized, low-price houses have decreased, there is a concern over housing supply difficulties.
In this, the government is increasing supply of "affordable" houses by introducing the
"Urban Dwelling Housing" system


The Housing Act provides that urban dwelling housing refers to small-and mid-sized
congregate housing for less than 150 households to be built in urban areas

The urban dwelling housing refer to small-and mid-sized congregate housing (85m2) for 20 to 150 households to be built in urban areas with approval of housing development planning projects.
The urban dwelling housing is different from general congregate housing because there are restrictions on the construction area, dwelling area per household and the total number of households, but some obligations relating to sales, construction inspection and parking lots and construction standards are eased.
The urban dwelling housing is divided into complex type multiple housing, a studio apartment and dormitory type housing depending on exclusive dwelling area per household and common kitchen and laundry room sharing.


Large construction companies and banks take a negative attitude on the system, but
small-and mid-sized construction companies and saving banks take more positive attitude

As of the end of January, approved urban dwelling houses reached approximately 4,000.The government expects the number to reach 20,000 this year.

However, large construction companies are avoiding participation in the system due to small scale of projects and low profit margin, and the banking sector also takes a negative attitude on PF for the urban dwelling housing.
Small-and mid-sized construction companies and saving banks take more positive attitude on the system because they can have housing construction volume, low unsold risks of houses or new revenue streams.


From the perspective of financial institutions that provide PF loans, they should pay
closer attention to business value and additional measures for preservation of claims
since outstanding construction companies hardly enhance credit

Since small-and mid-sized construction companies will mainly join the urban dwelling housing project, like the existing PF loans, outstanding construction companies will hardly enhance credit.
Accordingly, financial institutions should pay closer attention to business value (sales possibility) and other measures for preservation of claims other than credit enhancement by construction companies, including revenue control and management.
In addition, since additional deregulation and business value improvement are possible, financial institutions should pay attention to a change in regulations