"Avoiding 2-Year Actual Residence"…Gaepo Reconstruction Sees Consecutive Union Approvals and Record-High Prices

Gaepo Jugong 6·7 Complex Application Submission
13·15-Story Mid-Rise Integrated Reconstruction Promotion
Avoiding Mandatory Residence Regulations

Project Speed Boosts Housing Prices
Complex 7 60㎡ Actual Transaction Price Exceeds 2 Billion Won
Residence Regulations Turn Out to Be a Positive Factor

[Asia Economy Reporter Donghyun Choi] Mid-rise reconstruction complexes in Gaepo-dong, Gangnam-gu, Seoul are consecutively applying for approval to establish associations. This is a move to avoid the resident occupancy obligation for association members, which will be applied as early as the beginning of next year. As the project gains momentum, apartment prices in this area, which had been taking a breather, are also turning upward.

According to the maintenance industry on the 11th, the reconstruction promotion committees for Jugong Complexes 6 and 7 in Gaepo-dong recently submitted applications for association establishment approval to the Gangnam District Office. Complex 6 consists of 1,060 households and Complex 7 has 900 households, both mid-rise apartments of 13 to 15 floors, and they are promoting integrated reconstruction. Residents plan to increase the number of households from the existing 1,960 to 2,994 through reconstruction. The complexes are located in a prime area adjacent to Daemosanipgu Station on the Bundang Line subway and are close to Yangcheon Elementary School and Gaewon Middle School, making the location highly favorable. To the east, the D.H. Xi Gaepo, which moved in last July, is located.

By applying for association establishment approval, Jugong Complexes 6 and 7 in Gaepo-dong have avoided the reconstruction 'resident occupancy regulation' announced by the government through the June 17 real estate measures, which is scheduled to be introduced early next year. This regulation grants move-in rights only to reconstruction association members who have resided for more than two years, but if the association establishment approval is applied for before the related law is enforced, the obligation is exempted. Among the mid-rise complexes in Gaepo-dong, Complex 5 is currently the only one that has received association establishment approval. It obtained approval on the 1st of this month, thus avoiding the resident occupancy obligation. Complex 5 is promoting reconstruction from the existing 940 households to 1,307 households.

As the project accelerates, prices are also rising. The 60.76㎡ (exclusive area) unit in Complex 7 surpassed 2 billion KRW in actual transaction price for the first time on the 19th of last month. The 83.21㎡ unit in Complex 5 was traded at 2.345 billion KRW on the 17th of last month, setting a record high, and the 53.98㎡ unit in the same complex also recorded a new high of 1.9 billion KRW on the 7th of last month. A representative from real estate agency A in the area said, "Many association members live overseas or in other regions, so the project progress had been slow, but the atmosphere changed after the resident occupancy regulation was announced," adding, "With the association approval expected within the year, prices are being driven up."

In the market, the resident occupancy obligation regulation, introduced by the government to block speculative inflows into maintenance project complexes, is rather acting as a positive factor in many reconstruction promotion complexes in Seoul. Some reconstruction complexes in Apgujeong-dong 1 to 5 districts are also pushing for association establishment approval recently, consecutively setting new record prices. The 144㎡ unit in Hyundai 6th Complex in Apgujeong-dong recorded a highest price of 3.75 billion KRW on the 4th of last month and then again set a new record at 3.9 billion KRW two weeks later. The 160.28㎡ unit in Hyundai 2nd Complex also recorded a highest price of 4.28 billion KRW on the 5th of last month.

Meanwhile, the amendment to the 'Act on Maintenance and Improvement of Urban Areas and Dwelling Conditions' containing the resident occupancy regulation was postponed after failing to pass the Land, Infrastructure and Transport Committee’s bill review subcommittee in the National Assembly last month. Considering the current National Assembly schedule, it is expected that the originally planned passage within this year will be difficult.

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