Greenbelt Mention Causes Stir in Naegok-dong, Eunma Sways as Reconstruction Talk Emerges

A Word Shakes the Market
Unma 76㎡ Asking Price Rises by 100 Million Won from Last Month's Actual Transaction
Land Prices Soar Around Naegok-dong, a Strong Candidate for Greenbelt Release

[Image source=Yonhap News]

[Asia Economy Reporters Donghyun Choi, Onyu Lim] "The market moves with every word spoken." (A representative from real estate agency A in Daechi-dong, Gangnam-gu, Seoul)

The real estate supply measures, which have even drawn in the political sphere, are instead stirring up the market. In the absence of a control tower, a flood of competing measures is rather increasing public anxiety. Following news of the ruling party and government discussing the lifting of the development restriction zone (Greenbelt), investors have been flocking to the Gangnam Greenbelt in Seoul, while the Seoul Metropolitan Government's proposal to ease reconstruction regulations has caused asking prices for reconstruction apartments in Gangnam to surge and the market to fluctuate.

According to the real estate brokerage industry on the 20th, the asking price for a 76㎡ (exclusive area) unit in Eunma Apartment in Daechi-dong, Gangnam-gu, Seoul, is currently set at 2 to 2.1 billion KRW. This is more than 100 million KRW higher than the highest actual transaction price of 1.97 billion KRW just before Daechi-dong was designated as a land transaction permission zone last month. This complex is even showing a temporary shortage of listings. A representative from real estate agency S in Daechi-dong said, "A few days ago, there was an inquiry about buying a unit in Eunma Apartment, but all the owners were unreachable, so the deal fell through," adding, "With news of moves to ease reconstruction regulations, asking prices have recovered to the levels before the December 16, 2020 real estate measures."

Eunma Apartment is included in the land transaction permission zone, effectively blocking gap investments where tenants buy homes with jeonse deposits. Moreover, to obtain reconstruction occupancy rights, a two-year actual residence requirement must be met, leading many to expect a buyer's market. Nevertheless, prices have recently risen because, as part of supply expansion, the government mentioned lifting the Greenbelt, prompting Seoul City to counter with a card to ease reconstruction regulations.

Despite the Ministry of Land, Infrastructure and Transport, the competent authority, opposing Seoul City's proposal on the grounds of stimulating housing prices, apartment prices are fluctuating with just a word. In fact, besides Eunma Apartment, asking prices for reconstruction complexes in Jamsil-dong, Songpa-gu's Jugong 5 Complex and Yeouido area in Yeongdeungpo-gu are also rising. For example, the actual transaction price for a 76㎡ unit in Jugong 5 Complex in Jamsil was 2.133 billion KRW just before it was designated as a land transaction permission zone, but the current asking price is 100 million KRW higher, ranging from 2.2 to 2.3 billion KRW.

The Greenbelt lifting controversy is also stimulating investor sentiment. Demand is pouring in not only for the Gangnam Greenbelt but also for surrounding land, causing asking prices to soar and listings to disappear.

According to nearby real estate agencies, there is almost no land available for transaction in Naegok-dong, Seocho-gu, and Segok-dong, Gangnam-gu, which have been mentioned as strong candidates for Greenbelt lifting. A representative from real estate agency B in Naegok-dong said, "After rumors in 2018 that the Greenbelt in this area would be lifted, many ownership changes occurred, and now there are few listings," adding, "Buyers are flocking, but landowners are reluctant to sell at most prices." A representative from real estate agency C in Segok-dong explained, "Currently, the Greenbelt market price for paddy fields is around 2.5 to 3.5 million KRW per 3.3㎡," and "There have been many inquiries about Greenbelt investments with premiums recently, but except for the Suseo Station area, there is not much land worth buying."

In fact, the Greenbelt in this area has often been mentioned as a candidate for lifting in the past, and it has been confirmed that many investments have been made since the beginning of this year as so-called 'money put away.' According to the Ministry of Land's actual transaction price disclosure system, transactions worth 87 billion KRW have been made in Seoul Greenbelt areas from the beginning of the year until the day before yesterday. Despite some contracts not yet reported and thus not included in the tally, this already exceeds last year's Greenbelt transaction amount (77.1 billion KRW) for the same period. By region, 7.5 billion KRW worth of transactions occurred in Naegok-dong alone, and 3.45 billion KRW in Segok-dong. In March, a 1,076㎡ paddy field in Jagok-dong, Gangnam-gu, adjacent to Segok-dong, was sold in a single transaction for 3.5 billion KRW. This is the second-largest Greenbelt transaction amount this year for a single deal.

Local real estate agencies are concerned that if the Greenbelt lifting controversy continues, it will also stimulate land prices in surrounding areas. If the Greenbelt is lifted, the area will immediately be designated as a land transaction permission zone, making transactions difficult, which will shift demand to surrounding land. An industry insider explained, "There is a high possibility that massive investment funds will flow into land around planned housing development sites due to expectations of commercial district formation."

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