D-7 Until the End of the Sale Price Ceiling System Grace Period... Mixed Feelings Over the 'Last-Chance Sale'

Preparation for Tenant Recruitment at 10 Seoul Sites

Banpo Raemian One Bailey Plans to Conclude Negotiations with HUG
Jamwon Raemian One Pentas Also Expected to Board the Last Train Smoothly

Dunchon Jugong Faces Internal Conflict Over Sale Prices
Forecast Indicates Difficulty Avoiding Price Ceiling System

[Asia Economy Reporter Lee Chun-hee] As the grace period for the private land sale price ceiling system comes to an end in a week, emotions are mixed among the targeted complexes. While each complex appears to be accelerating efforts to avoid regulations, some complexes are facing internal conflicts that delay project schedules, making the application of the price ceiling system inevitable.

According to industry sources on the 21st, there are about 10 reconstruction and redevelopment complexes in Seoul preparing to apply for resident recruitment announcements by the 28th. These include Dunchon-dong Jugong Apartments in Gangdong-gu, as well as ▲ Raemian One Bailey (Sinbanpo 3rd & Gyeongnam Reconstruction) in Banpo-dong, Seocho-gu ▲ Raemian One Pentas (Sinbanpo 15th) in Jamwon-dong ▲ Eunpyeong Jeungsan 2nd District ▲ Eunpyeong Susaek 6th and 7th Districts. The general sale units from these complexes amount to approximately 7,000 households.

The Ministry of Land, Infrastructure and Transport revised the Enforcement Decree of the Housing Act on October 29 last year to introduce the private land sale price ceiling system, deciding to postpone the application of the price ceiling system for six months for reconstruction and redevelopment projects that had applied for management disposition approval before that date. However, due to the increasing difficulties in project promotion caused by the spread of COVID-19, the grace period was extended by an additional three months until the 28th of this month.

The affected projects are making efforts not to miss the last chance of the extended three-month grace period. Raemian One Bailey, originally scheduled for sale in September, held a general meeting on the 9th and approved a change to the management disposition plan. The association plans to apply for the change to Seocho-gu and complete price negotiations with the Housing and Urban Guarantee Corporation (HUG) before the 28th to proceed with sales. This apartment complex, with a total of 2,990 households, will have 225 units for general sale. The sale price per 3.3㎡ is expected to be around 48.91 million KRW. Since last year, HUG has effectively set the sale price at 48.91 million KRW per 3.3㎡ for reconstruction sale complexes in the Seocho-gu area.

Raemian One Pentas, which recently changed its construction company to Samsung C&T, has reportedly completed relocation and demolition and finished negotiations with HUG on the general sale price, so it is expected to avoid the price ceiling system smoothly.

The fate of the largest Dunchon Jugong... Sharp conflict between the association executive and emergency committee leads to a deadlock

In August last year, banners opposing the price ceiling system were displayed by association members at the reconstruction site of Dunchon Jugong Apartments in Gangdong-gu, Seoul.
[Image source=Yonhap News]

The key issue is the fate of the mammoth reconstruction complex, Dunchon Jugong Apartments, with 12,030 households. This complex, with 4,786 units for general sale, is facing internal conflicts over price setting, leading to the resignation of the association head, raising expectations that avoiding the price ceiling system will be difficult.

Currently, the association executive claims that if the price ceiling system is applied, the maximum sale price per 3.3㎡ would be 26.37 million KRW for general sale. They argue that the sale price must be lower than the 29.78 million KRW per 3.3㎡ negotiated with HUG if the price ceiling system is implemented. On the other hand, the Emergency Response Committee, opposing the association’s stance, insists that even under the price ceiling system, the sale price can be set as high as 36 million KRW per 3.3㎡.

The association executive has stated, "If the price ceiling system price is higher, we will resign," and plans to apply for the resident recruitment announcement using the HUG price first. They intend to request the district office to postpone approval of the announcement and then finalize the exact price under the price ceiling system by September, selling at the higher of the two prices. Seoul City also explained that passing the general meeting can be supplemented afterward, so applying first and holding the general meeting later is possible.

The Emergency Response Committee countered by announcing plans to hold a general meeting on the 8th of next month to dismiss the entire executive. They claim to have received a promise from Lee Jung-hoon, the mayor of Gangdong-gu and the approval authority for the resident recruitment announcement, to suspend all related administrative procedures until before the dismissal general meeting.

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