[6·17 Real Estate Measures] Seoul Jamsil Area Designated as Land Transaction Permission Zone... Permission Required for Sales

Designation of Land Transaction Permission Zone Around Jamsil Sports Complex
Strengthening of Reconstruction Safety Inspection Standards... Establishment of Penalty Provisions
Mandatory Funding Plans in Speculative Overheated Districts Including Seoul

Minister of Land, Infrastructure and Transport Kim Hyun-mi is making an announcement regarding real estate regulation measures at the Government Seoul Office in Jongno-gu, Seoul on the 17th. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Moon Jiwon] The real estate measures announced by the government on the 17th include designating the area around Jamsil Sports Complex in Seoul as a land transaction permission zone and strengthening safety inspections for reconstruction projects. These measures reflect the government's determination to curb the soaring housing prices caused by recent successive development benefits at an early stage. In particular, the government plans to restrict the eligibility for reconstruction association members to apply for apartment sales to those who have resided for more than two years, which is expected to spark controversy.

According to the measures, until now, reconstruction association members could receive apartment sales regardless of whether they actually resided there, but from now on, in speculative overheated districts such as Seoul, only those who have resided for two years by the time of the sales application will be allowed to apply.

The government plans to revise the Urban and Residential Environment Improvement Act around the end of the year to apply these regulations to complexes that apply for association establishment approval thereafter. Complexes such as Eunma Apartment in Daechi-dong, Gangnam-gu, which have not yet received association establishment approval, are expected to be immediately subject to these regulations.

Along with this, the Seoul Metropolitan Government will hold an urban planning committee meeting to designate the area around the sites where the Jamsil Sports and MICE (Meetings, Incentives, Conferences, and Exhibitions) development project and the Yeongdong-daero complex development project are underway as land transaction permission zones.

In these areas, right after Seoul announced on the 5th the completion of the feasibility study for the Jamsil MICE private investment project, buying sentiment concentrated, causing prices to surge in an unstable manner. The 82㎡ (exclusive area) apartment in Jamsil Jugong 5 Complex, Jamsil-dong, Songpa-gu, a reconstruction promotion complex, was traded at 2.15 billion KRW, approaching the previous high, and asking prices in popular complexes such as Jamsil Parkrio and Jamsil Els also rose by tens of millions to hundreds of millions of KRW.

The Ministry of Land, Infrastructure and Transport explained, "In a situation where market uncertainty is high, when major development benefits act in combination, there is a risk of intensifying overheating by stimulating buying sentiment in neighboring areas. To preemptively block market instability factors and establish a real estate market order centered on actual demand, we promoted the designation of land transaction permission zones in consultation with the Seoul Metropolitan Government."

Once designated as a land transaction permission zone, acquiring land or housing exceeding a certain area or site share area requires permission from the head of the relevant district office. Residential land must be used only for actual residence after permission is granted, and sales or leasing are prohibited, thereby completely blocking speculative transactions.

The announcement of the land transaction permission zone for the Jamsil area will be made on the 18th, and the designation will take effect from the 23rd. The government stated that if market overheating spreads to surrounding areas, it will actively consider expanding the designated zones immediately.

The criteria for reconstruction safety inspections, which had been a factor stimulating housing prices in Mok-dong New Town, Yangcheon-gu, Seoul, will also be strengthened. To promote reconstruction, one must undergo first and second safety inspections to prove that reconstruction is necessary. Currently, the first safety inspection institution is selected by the city, county, or district, but in the future, it will be upgraded to be designated by the metropolitan city or province.

Penalties will also be introduced for faulty safety inspection reports. A fine of up to 20 million KRW will be imposed, and if false or faulty reports are detected, bidding for safety inspections will be restricted for one year. The appropriateness review of the first inspection results, which had been mainly document-based, will also mandate on-site investigations to thoroughly examine whether the stage requires reconstruction, such as rebar corrosion or exterior wall finishing conditions. If these measures are implemented, many reconstruction promotion complexes in Seoul are expected to face setbacks in their project plans.

Additionally, the government expanded the scope of those required to submit funding plans. Previously, the submission of funding plans was limited to houses priced over 300 million KRW in speculative overheated districts and regulated areas such as Seoul, but from now on, when trading houses in speculative overheated districts and regulated areas, funding plans must be submitted regardless of the transaction amount.

In particular, the requirement to submit supporting documents for funding plans has been expanded from houses over 900 million KRW in speculative overheated districts to all houses within speculative overheated districts. Supporting documents are materials that can objectively verify the authenticity of the contents of the funding plan. The government will use these to proactively investigate abnormal transactions such as irregular funding. The government plans to revise the Enforcement Decree of the Real Estate Transaction Reporting Act and other related regulations to implement these measures immediately from September.

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