Seoul’s Jamsil-dong neighborhood in Songpa-gu and the Daechi-Samsung-Cheongdam-dong area in Gangnam-gu have been extended by one year. The move is likely aimed at stimulating Seoul’s rebounding home prices following the April rezoning of Apgujeong스포츠토토, Yeouido, Mokdong, and Seongsu.
The Seoul Metropolitan Government held its eighth urban planning committee on June 7 and announced that it has redesignated a total of 14.4 square kilometers as a land transaction permit zone, including the International Exchange Complex, which stretches from Coex in Gangnam-gu to Jamsil Sports Complex in Songpa-gu, as well as nearby Jamsil-dong and Samsung, Cheongdam, and Daechi-dong in Gangnam-gu. The designation will be extended until June 22 next year.
The Seoul Metropolitan Government explained, “This is an inevitable measure to prevent the real estate market from overheating,” adding, “If the areas where large-scale development projects related to the International Exchange Complex are being carried out are removed from the permit zone, the possibility of land prices surging and speculative forces entering the market will increase.”
The land transaction permit zone, which requires permission from the mayor of the competent district office to sell houses, shops, and land above a certain size and can only be sold for residential purposes for two years, is considered one of the most powerful devices to control speculative demand.
The International Exchange Complex District is a project to create a MICE hub that connects industrial facilities for international business, exhibitions, and conventions with waterfront space on 1.66 million square meters around COEX, Hyundai Motor GBC (former KEPCO site), and Jamsil Sports Complex. After designating the district, the Seoul Metropolitan Government designated Daechi-Samsung-Cheongdam-dong (9.2㎢) and Jamsil-dong (5.2㎢) as land transaction permit areas in June 2020 due to concerns about speculation. Since then, the deadline has been extended twice in one-year increments.
Residents have been protesting to the ward office to remove the designation, saying that the anticipation of development has already faded and that it is a gross violation of their property rights rather than catching speculators. However, there are many observers who believe that it will be difficult to remove the designation, as apartment sales prices in Gangnam and Songpa neighborhoods are rising again.
According to the Korea Real Estate Agency, apartment sales prices in Songpa increased by an average of 0.22% in the last week of May compared to the previous week, and by 0.13% in Gangnam-gu.
There are also equity issues with the previously redesignated areas of Apgujeong-dong in Gangnam-gu, Mok-dong in Yangcheon-gu, and Yeouido-dong in Yeongdeungpo-gu. In April, the Seoul Metropolitan Government extended the designation of apartment districts in Apgujeong-dong, Gangnam-gu, Yeouido-dong, Yeongdeungpo-gu, Mok-dong, Yangcheon-gu, and Seongsu-dong 1 and 2-ga Strategic Maintenance Area (Zones 1 to 4) in Seongdong-gu for one year.
However, the Seoul Metropolitan Government plans to review the entire designated area after October 19, as the revision of the Real Estate Transaction Reporting Act will allow it to designate land transaction permit zones by specifying the permitted uses and locations. The Ministry of Land, Infrastructure, and Transport is currently preparing an enforcement decree in accordance with the revised law.
“This redesignation is an inevitable choice to actively support the expansion of housing supply,” said Yoo Chang-soo, Seoul’s second vice mayor for administration. “Although there are some concerns such as restrictions on transactions, it is expected to be effective in reorganizing the market to be more resident-centered.”