"Limitations of Small-Scale Development Supply, Market Becomes More Unstable"

Greenbelt Release Card 'Off the Table'
10,000-20,000 Units Taereung Golf Course Development Plan
Questionable Effect on Housing Price Stability Due to Peripheral Location
Gangnam Areas Like Daechi-dong SETEC Mentioned
Only a Few Thousand Units, Demand Impact Uncertain

The government is actively working to increase the housing supply as a follow-up to the July 10 real estate measures, and is discussing plans to build housing on the site of the Taereung Golf Course owned by the Ministry of National Defense. The photo shows the Taereung Golf Course in Nowon-gu, Seoul, on the 21st. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporters Inho Yoo and Yuri Kim] As the government’s plan to expand housing supply is expected to focus on discovering small-scale sites following the cancellation of the greenbelt release, controversy over the effectiveness of the measures is spreading. Since there is no groundbreaking plan to expand supply, criticism is being raised that the response is merely a one-off measure that fails to meet market demands for "continuous supply expansion in the Gangnam area." Although large-scale supply is expected to be included through the development of the Taereung Golf Course and the expansion of the 3rd New Town supply, experts point out that since these are in outlying areas, it is uncertain whether they will effectively stabilize housing prices in Seoul.

According to the Ministry of Economy and Finance and the Ministry of Land, Infrastructure and Transport on the 21st, the government’s housing supply expansion plan, which is expected to be announced as early as next week, will not significantly deviate from the scope of the July 10 real estate measures. Currently, the plan includes ▲utilization of idle and publicly owned land ▲high-density development in urban areas ▲expansion of the 3rd New Town supply ▲activation of public redevelopment and reconstruction, with the addition of development of the Taereung Athletes’ Village site. Most of these are small-scale site developments and rely on active private sector participation, so the actual perceived supply effect is expected to be limited.

Experts point out that this measure also has limitations in calming the anxiety of homebuyers. Professor Changmoo Lee of Hanyang University’s Department of Urban Engineering said, "The supply in areas preferred by actual buyers is still woefully insufficient," adding, "The private supply market should be able to move through easing floor height restrictions in Seoul, increasing floor area ratios, and relaxing reconstruction regulations."

Another problem is that securing additional sites is also difficult. Apart from the currently discussed sites, it is almost impossible to discover additional idle land, so the measure is likely to be a 'one-shot' policy. It is insufficient to send a signal that supply will be continuously expanded. For example, sites currently under consideration for housing in the Gangnam area, such as the SETEC site in Daechi-dong, Gangnam-gu, the Seoul Housing and Communities Corporation headquarters, and the Seoul Medical Center Gangnam branch, can only accommodate a few thousand households at most. In the case of public redevelopment, reconstruction, or high-density urban development, the plan is to expand supply through incentives such as easing floor area ratios, but to secure public interest, at least half of the supply must be small rental housing targeted at young people, which creates a gap with middle-class demand.

Professor Daejung Kwon of Myongji University’s Department of Real Estate said, "The shortage of supply in downtown Seoul is due to various regulations that restrict the housing market," and argued, "To send a signal for continuous supply expansion rather than a one-time measure, drastic deregulation is necessary." Concerns were also raised about the uncertain effects of the Taereung Athletes’ Village development, which the government presented as a surprise card. Professor Kwon pointed out, "The Taereung Golf Course is adjacent to Galmae District and Byeollae New Town, and the Korea Land and Housing Corporation (LH) is even building rental apartments nearby," adding, "Developing a new town without considering transportation infrastructure may worsen the surrounding residential environment."

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