Seoul City "Jamsil, Samseong, Cheongdam, Daechi-dong Require Permission for Home Purchase Starting from the 23rd"

Permission from the District Mayor Required for Land Transactions Exceeding 18㎡ in Residential Areas and 20㎡ in Commercial Areas
Passed Do-Gye Committee Review on the 17th... Designated for One Year Starting the 23rd with Extension Under Review
"Blocking Speculative Demand Influx Ahead of Large-Scale Development Projects"

Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Kim Yuri] The Seoul Metropolitan Government has designated four neighborhoods near the international exchange complex district under development between Jamsil and COEX (Jamsil-dong in Songpa-gu, Samsung-dong, Cheongdam-dong, and Daechi-dong in Gangnam-gu), covering a total area of 14.4㎢, as a land transaction permission zone. The designation period is one year.

The city explained that this preemptive measure was taken because the area is poised for large-scale development projects such as the international exchange complex district, Yeongdong-daero metropolitan complex transfer center, and Hyundai Motor GBC (former KEPCO site), which could stimulate buying sentiment in the surrounding areas and raise concerns about speculative demand inflow.

In particular, the city viewed the existing apartments, detached houses, and commercial buildings in the surrounding residential areas as highly vulnerable to speculative demand inflow, and thus included the entire area in the land transaction permission zone. The goal is to firmly respond to speculative transaction demand and establish a market order centered on actual demand.

The international exchange complex district is a project to create a MICE (Meetings, Incentives, Conferences, and Exhibitions) hub linking four core industry facilities (international business, sports, entertainment, exhibition/convention) and the Han River and Tancheon waterfront spaces across 1.66 million square meters stretching from COEX to Hyundai Motor GBC to Jamsil Sports Complex.

On the 5th, the 'Jamsil Sports & MICE Private Investment Project' completed its eligibility review and plans to conduct a public competitive bidding process within the year through a third-party proposal announcement. The 'Yeongdong-daero Metropolitan Complex Transfer Center Construction Project,' which will serve as the gateway to the international exchange complex district, requested bidding on the 13th and is preparing for the bid announcement.

Earlier on the 5th, the city announced the completion of the eligibility review for the Jamsil Sports & MICE private investment project and stated that it would immediately designate the area as a land transaction permission zone if signs of real estate overheating in the surrounding area are detected. The city is also continuously monitoring market trends through actual transaction price investigations.

Once designated as a land transaction permission zone, transactions involving housing, commercial buildings, or land above a certain size require permission from the mayor or district head. If a land transaction contract is concluded without permission, the offender faces imprisonment of up to two years or a fine of up to 30% of the land price. Especially for residential land, it must be used solely for actual residence for two years, with sales or leasing prohibited during this period.

Seoul plans to maximize the purpose of the land transaction permission zone system to curb speculation by lowering the land area requiring permission to about 10% of the statutory standard area (over 18㎡ in residential areas, over 20㎡ in commercial areas). According to the Enforcement Decree of the Real Estate Transaction Reporting Act, the standard area (over 180㎡ in residential urban areas, etc.) can be separately announced within a range of 10% to 300%.

The city announced that the land transaction permission zone designation plan with these details passed the Seoul Urban Planning Committee review on the 17th. It will be announced on the 18th and take effect from the 23rd. The designation period is from the 23rd until June 22 of next year.

The city will continuously monitor real estate market trends and comprehensively review whether to re-designate (extend) the zone upon expiration of the designation period.

Meanwhile, according to Article 10 of the Act on Reporting and Inspection of Real Estate Transactions, the mayor or governor may designate a land transaction permission zone after review by the urban planning committee in areas where speculative land transactions are rampant or land prices are rapidly rising, or where such concerns exist. Those intending to acquire land exceeding a certain area must obtain prior permission from the mayor or district head by specifying the land use purpose. Contracts made without permission are invalid, and violators face imprisonment of up to two years or fines up to 30% of the land price. Those granted permission are obligated to use the land according to the approved purpose, such as self-residence or self-management, for a certain period. Especially for residential land, it must be used solely for actual residence for two years, prohibiting sales or leasing during this period. If the land is not used as intended, a compliance order within three months will be issued, and if not complied with, an enforcement penalty of up to 10% of the acquisition price will be imposed annually until compliance. However, if it is impossible to use the land as originally permitted due to unavoidable reasons such as bankruptcy risk, exemption from the usage obligation may be granted after review by the district urban planning committee.

Kwon Ki-wook, Director of the Seoul Urban Planning Bureau, said, "As the international exchange complex district development project has become visible recently, media and investor interest has concentrated, increasing the possibility of real estate overheating in the surrounding areas. Considering the location, scale, and ripple effects of the project comprehensively, we designated the land transaction permission zone in consultation with the Ministry of Land, Infrastructure and Transport." He added, "If speculative demand is detected in areas excluded from this designation in the future, we plan to actively consider expanding the designated zone."

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