'Price Ceiling Delay' on the Edge... Banpo One Bailey Speed Race

Avoiding Price Ceiling, Shift from Bulk Sale to Pre-Sale
Project Implementation Change Approval Fast-Tracked, 20 Days Shorter Than Expected
Seoul City Maintenance Project Support TF Streamlines Administrative Procedures

[Asia Economy Reporter Donghyun Choi] As the reconstruction project of Sinbanpo 3rd and Gyeongnam Apartments in Banpo-dong, Seocho-gu, Seoul gains momentum, the possibility of avoiding the application of the private land price ceiling system has increased. This complex once pursued a full sale of general sale units and administrative litigation against local governments to escape price controls, but due to strong government opposition, it switched to pre-sale and is preparing the project accordingly.

According to the maintenance industry on the 6th, Seoul City held a Structural Safety Expert Committee meeting yesterday for Sinbanpo 3rd and Gyeongnam Apartments and passed the structural safety review. This complex, being reconstructed under the name "Raemian One Bailey," received approval for the management disposition plan before October 29 of last year, when the enforcement decree of the private land price ceiling system was revised. Therefore, if the approval for the resident recruitment announcement is applied for before April 28, the price ceiling system will not apply. At the end of last month, the change approval for the project implementation passed in about 40 days, which was faster than initially expected, marking the project’s 80% completion. Considering that changes to project implementation approval usually take about two months, the schedule was shortened by about 20 days.

One Bailey is currently accepting applications for changes in unit sizes from association members. This is because 166 remaining units are left due to changes in the project plan. The association plans to proceed with the general meeting for approval of the management disposition plan change, excavation review, and sales guarantee review within two months after completing this procedure. An association official said, "After withdrawing the administrative lawsuit, we are cooperating smoothly with Seoul City and Seocho District Office to proceed quickly with the project procedures," and added, "We expect no problem in issuing the sales announcement before the end of April, when the price ceiling exemption period ends."

Last October, One Bailey pursued a plan to sell all 346 general sale units to a single rental management company called "Trust Stay." They intended to transfer the entire quantity to a private company at 60 million KRW per 3.3㎡, fearing reduced profits due to the price ceiling system. When the government and local governments opposed this, citing legal violations, they prepared for administrative litigation. However, since the chance of winning was low and the possibility of avoiding the price ceiling system increased by proceeding quickly with the project, they ultimately chose pre-sale.

The reason this complex could accelerate the project was largely due to the "Maintenance Project Support Task Force (TF)" recently formed by Seoul City and local governments as part of the December 16 real estate measures. The TF is reportedly helping speed up projects by simplifying maintenance project procedures, focusing on complexes exempted from the price ceiling system. Recently, the TF visited the One Bailey association as its first site visit to listen to difficulties. A Seoul City official said, "We are supporting to expedite the sales schedule to avoid the price ceiling system."

With the permit support from the maintenance project TF, the project speed of One Bailey and other Gangnam area complexes with deferred management disposition approval is expected to accelerate further. Currently, besides One Bailey, complexes in Gangnam-gu, Seocho-gu, Songpa-gu, and Gangdong-gu that have received management disposition approval and are undergoing relocation and demolition include ▲Jugoong 1st and 4th complexes in Gaepo-dong, Gangnam-gu ▲Sindonga 1st and 2nd in Gildong, Gangdong-gu ▲Jugoong in Dunchon-dong, Gangdong-gu ▲Hanshin 15th in Banpo-dong, Seocho-gu ▲Sinbanpo 14th and Woosung in Jamwon-dong, Seocho-gu ▲Miseong, Clover, and Jinju Apartments in Sincheon-dong, Songpa-gu. However, some complexes are reportedly delaying projects or pursuing post-sale due to concerns about not receiving appropriate sale prices. The maintenance project TF also plans not to support negotiations on sale prices with the Housing and Urban Guarantee Corporation (HUG).

This content was produced with the assistance of AI translation services.