'The Paradox of Regulation'... Apgujeong, Gaepo, Gwacheon Prime Reconstruction Association Establishment Imminent

Speeding Up Projects to Avoid 2-Year Residency Rule
Gwacheon Jugong Complexes 8 & 9 Achieve Over 75% Agreement Rate
Apgujeong Hyundai and Gaepo Jugong Also Set for General Meetings Soon
Reconstruction Momentum Drives Record-High Prices

[Asia Economy Reporter Onyu Lim] Government regulations are injecting new life into major reconstruction projects that had been stagnant. To avoid the '2-year actual residence' obligation, reconstruction complexes in prime locations across Seoul and the metropolitan area are accelerating their applications for association establishment approval. As expectations for the projects grow, the value of these complexes is also rising.

According to the maintenance industry on the 19th, the Jugong 8 and 9 complexes in Burim-dong, Gwacheon-si, Gyeonggi Province, recently surpassed the 75% resident consent rate required for reconstruction association establishment. The 8 and 9 complexes, with 1,395 and 707 households respectively, are currently pursuing integrated reconstruction. The resident consent rate is about 90% for the 8 complex and over 56% for the 9 complex. Consent from commercial association members is also reported to be around 65%.

The current promotion committee is focusing on securing a 50% resident consent rate per building, which is additionally required for association establishment approval. Since only two residents from one building in the 9 complex need to give consent, it is expected that the application for association establishment approval can be submitted within this year. A representative from the apartment promotion committee said, "We plan to hold the general meeting for association establishment and apply for approval from the city by December at the latest."

The 8 and 9 complexes are among the slowest in reconstruction progress among the aging Jugong apartment complexes in Gwacheon-si. Due to differing opinions among residents of the two complexes over significant land shares, the promotion committee was only formed in May. Nevertheless, the fact that association establishment approval is possible within just six months is largely attributed to the government's June 17 real estate measures, according to the promotion committee. At that time, as part of the measures, the government amended the 'Act on Maintenance and Improvement of Urban Areas and Dwelling Conditions' to strengthen the policy that only residents who have actually lived in reconstruction complexes within speculative overheated districts such as Seoul for two years are eligible for new apartment allocations. However, a transitional provision was set so that if the association establishment approval is applied for within this year, this regulation does not apply, which rapidly increased the resident consent rate in a short period.

The atmosphere is similar in major reconstruction complexes in Seoul. In Apgujeong-dong, Gangnam-gu, five out of six maintenance districts?District 1 (Miseong 1 and 2), District 2 (Shinhyundai 9, 11, 12), District 3 (Hyundai 1 to 7, 10, 13, 14), District 4 (Hyundai 8, Hanyang 3, 4, 6), and District 5 (Hanyang 1 and 2)?have succeeded in securing consent rates for association approval applications in the second half of the year. This contrasts with the previously passive attitude of residents in this aging apartment area compared to other Gangnam districts. Ironically, the government's measures to regulate reconstruction have become a driving force for project promotion.

The Jugong 6 and 7 complexes in Gaepo-dong, Gangnam-gu, also recently surpassed a 90% consent rate and will hold a general meeting for association establishment on the 28th. Previously, Jugong 5 completed its association founding general meeting last month and even submitted the application to Gangnam District Office. In Jamwon-dong, Seocho-gu, Shinbanpo 2nd complex received association establishment approval on the 16th after 17 years since the promotion committee was formed.

As the projects gain momentum, prices are also rising. The Hyundai 7 complex in Apgujeong-dong, with an exclusive area of 157㎡, was sold at a record high of 4.19 billion KRW on the 15th of last month. This is 190 million KRW higher than the 4 billion KRW in August. Miseong 2 complex in Apgujeong-dong also traded at a record high of 3.2 billion KRW in September, up 550 million KRW from 2.65 billion KRW in April. The current asking price is set at 3.3 billion KRW.

An industry insider said, "If the association establishment application is submitted within this year, new buyers will not be subject to the 2-year actual residence regulation, increasing investment value. As the preference for owning a single solid property continues, prime reconstruction complexes are likely to increase in value until June next year, when the capital gains tax surcharge exemption ends."

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