Will Housing Prices Stabilize When 'New Residential Sites and Urban Development' Plans Emerge? ... Divergent Views on the 2·4 Measures

New Residential Sites to be First Released by the End of This Month
Urban Public Development Candidate Sites to be Announced in July
Record-High Supply Draws Market Attention... Housing Prices Stabilize
However, Controversies Over Cash Compensation and Resident Opposition
Government Expects Housing Price Stability... Residents Strongly Oppose

[Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] The government plans to disclose the first round of new public land candidates proposed under the February 4 supply plan as early as the end of this month, and to finalize the urban public development candidate sites (43,500 households) by July. The government believes that once these housing supply candidate sites are confirmed, market demand will stabilize and housing prices will ease.

The 'Public-led 3080+, Drastic Expansion Plan for Housing Supply in Metropolitan Areas' (commonly known as the 2·4 Plan) announced by the government on the 4th aims to secure sites for 836,000 households nationwide, including 320,000 households in Seoul by 2025. The supply from new public land is expected to reach 263,000 households, while supply from urban public housing complex projects and small-scale redevelopment will total 306,000 households.

Given the sheer volume, this is an 'unprecedented' scale that has attracted significant market attention. In particular, the new sites near the metropolitan area, where a total of 180,000 households will be newly built, reportedly have a total area approaching that of the 3rd generation new towns, leading to evaluations that they effectively constitute a 4th generation new town. The new metropolitan area sites are expected to be selected mainly in areas near Seoul or with good accessibility to Seoul.

In the market, Gwangmyeong, Siheung, and Hanam, which are frequently mentioned before the selection of new towns, are considered strong candidates. Woneung in Goyang, which was once considered for the 3rd generation new towns but excluded due to prior information leaks, is also mentioned. For good accessibility to Seoul, it is likely that the area already has a certain level of metropolitan transportation infrastructure such as railways and roads. There is analysis suggesting a high possibility that areas near the Great Train Express (GTX) lines A, B, and C will be included.

Interest is also high around the urban housing public development candidate sites, one of the core elements of the 2·4 Plan. On the 17th, Yoon Sung-won, the 1st Vice Minister of the Ministry of Land, Infrastructure and Transport, appeared on a radio broadcast and said, "The 43,500 households scheduled for supply this year will be announced by July at the latest, and the next batch for next year will be announced at the end of the year."

In Seoul, the government estimates there are 67 candidates for public direct redevelopment and reconstruction projects and 155 candidates for urban public housing complex projects. The industry expects that areas where New Town designations were lifted may be significantly included. These include large-scale areas such as Jangwi, Singil, Hannam, and Changsin New Towns, as well as Seongsu-dong in Seongdong-gu, Gocheok-dong in Guro-gu, Mullae-dong in Yeongdeungpo-gu, and Doksan-dong in Geumcheon-gu.

The government expects that once the candidate sites are officially announced and detailed consultations begin, residents will be highly motivated to participate due to strong incentives and a comprehensive support system. Vice Minister Yoon also expressed optimism, stating, "Basic inquiries have been received not only from Seoul's Gangnam and Gangbuk areas but also from metropolitan cities."

According to the weekly apartment price trends from the Korea Real Estate Board, as of the 15th, the apartment price increase rate in Seoul recorded 0.08%, narrowing for two consecutive weeks after 0.10% in the first week of this month. The KB Real Estate Live On's buyer dominance index also fell below 100 this week, recording 98.7. Analysts attribute this to reduced buying inquiries and a growing wait-and-see attitude following the announcement of the 2·4 Plan.

However, controversies remain. A representative issue is the 'cash settlement' controversy in areas where public-led development is possible. According to the government's explanation, those who purchase homes in public development project zones after the 4th of this month will not receive priority supply rights (move-in rights) and will be subject to cash settlement. Since compensation for cash settlement is based on appraised value rather than market price, there are concerns that owners may be forced out at prices lower than their purchase price.

Because of this, in some areas, public opposition to direct public implementation has already formed due to fears that sales transactions will cease. Strong resistance is seen in places such as Gwangmyeong in Gyeonggi Province, and Gangnam-gu, Yangcheon-gu, and Guro-gu in Seoul. Although the government has significantly strengthened various incentives to encourage resident participation, analysts say trust has been lost due to continued policy failures and tightened regulations aimed at curbing speculative demand. A reconstruction team official from a Seoul autonomous district said, "Since the 2·4 Plan, there have been almost no inquiries about public development," adding, "The preference for private development remains strong."

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