[Report] Mokdong 'Excited' by Reconstruction Green Light... Property Prices Soar by Hundreds of Millions in a Month

Mokdong District Housing Development Project District Unit Plan Traffic Impact Assessment
Signs of Relaxed Reconstruction Regulations Including Floor Area Ratio Increase
Mokdong Property Values Rising Despite Stricter Residency Requirements
"House Prices Not Suppressed, Only Worsened Jeonse Crisis" Criticism Also Raised

[Asia Economy Reporter Onyu Lim] "Isn't this a signal to buy a house?" (Mokdong A Real Estate Agency official)

On the afternoon of the 29th, the real estate agencies in the Mokdong area of Yangcheon-gu, Seoul, visited by the reporter, were unusually upbeat. This was because news had spread that the traffic impact assessment for the 'Mokdong District Land Development Project District Unit Plan,' a blueprint for the reconstruction of apartments in the new town area, had passed. Additionally, recent news that the government and Seoul city are considering increasing the floor area ratio for reconstruction complexes was also seen as positive.

The head of B Real Estate near the 5th and 6th complexes of the new town said, "The traffic impact assessment, which took nearly a year, has passed, and there is talk of increasing the reconstruction floor area ratio," adding, "Since housing supply is so insufficient, the government will have no choice but to ease reconstruction regulations."

This district unit plan is a master plan for the development of the 1st to 14th complexes of the new town apartments in Mokdong and Sinjeong-dong. The core of the plan is to reconstruct the existing new town, which currently has a total of 26,629 households, into a maximum of 35 floors with 53,375 households. With this plan alone, the number of apartment households in the area will more than double. If the floor area ratio increase, which is being discussed as a measure to expand housing supply, becomes a reality, the scale of construction could be even larger. Currently, the government's Housing Supply Expansion Task Force (TF) is reportedly actively considering easing reconstruction regulations by increasing the floor area ratio on the condition of public rental and public sale housing.

An official from C Real Estate near the 11th complex of the new town, which passed the first phase of the detailed safety inspection for reconstruction, said, "Mokdong has a low floor area ratio of 120-130%, so if reconstruction takes place, additional charges are expected to be almost none," and expressed hope that "if the floor area ratio increase is also realized, the profitability of the project will improve."

Mokdong Apartment, Yangcheon-gu, Seoul

The district unit plan will be finalized after passing the traffic impact assessment gateway, followed by the drafting of the district unit plan by Yangcheon-gu, review by the Urban and Architectural Joint Committee, and the decision and announcement of the district unit plan. A Yangcheon-gu office official explained, "The Mokdong District Land Development Project is a master plan for reconstructing the apartments in the area while maintaining a uniform appearance," adding, "Once the plan is finalized, applications for designation of maintenance zones will proceed for each complex."

The fastest progress in reconstruction is currently at the 6th complex. It passed the detailed safety inspection last month and also passed the appropriateness review. The 11th and 13th complexes have passed the first phase of the detailed safety inspection and are awaiting the appropriateness review. The 1st and 14th complexes are reportedly undergoing detailed safety inspection services. Recently, the 3rd and 10th complexes in Mokdong also announced a service bid for detailed safety inspections.

After the June 6 and 17 real estate measures strengthened requirements for actual residence and safety inspections for reconstruction, Mokdong apartment prices, which seemed to stall, have been hitting new highs daily due to successive positive factors. On the 16th, a 115.47㎡ (exclusive area) unit in the 5th complex was traded at 2.36 billion KRW, 160 million KRW higher than the previous highest price of 2.2 billion KRW. Compared to the sale price of 2.12 billion KRW on the 21st of last month, right after the June 6 and 17 measures, it rose by 240 million KRW. A 65.25㎡ unit in the 2nd complex was also traded at new highs of 1.49 billion KRW on the 3rd and 4th of this month, rising 190 million KRW compared to last month's actual transaction price of 1.3 billion KRW. A D Real Estate official near the 7th complex said, "As prices rise, buyers of apartments around 1.5 billion KRW, where mortgage loans are prohibited, are rushing to change their loan banks to pay the balance."

There are also criticisms that the strengthening of actual residence requirements for reconstruction has increased the number of owners who want to live in their homes, worsening the jeonse (long-term deposit lease) shortage without curbing house prices. An E Real Estate official in the area hinted, "Because the school district is good, there is a frenzy due to the lack of jeonse," adding, "Currently, only jeonse listings available after October are on the market."

There is also speculation that the upward trend in Mokdong house prices will accelerate further if the government announces housing supply measures. An industry official said, "The government says it will develop idle sites such as Taereung Golf Course, but the middle class wants to live in areas with good school districts and locations," and predicted, "Once maintenance zones are designated, prices will rise further."

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