"Overnight Real Investment from 50 Million to 1 Billion Won" Seoul Redevelopment Also Shows 'Oh!' Effect

As Candidate Oh Se-hoon Likely to Win with 'Redevelopment Activation'
Early Redevelopment Area Listings Soar in Price
Overheating of Low-Priced Listings in Dobong-gu Changdong, Guro-gu Guro-dong Areas
Concerns Raised Over a 'Second New Town Boom'

On the 26th, Oh Se-hoon, the People Power Party candidate for Seoul mayor, is greeting citizens on their way to work at Jeungmi Station Intersection on Yangcheon-ro, Gangseo-gu, Seoul. Photo by National Assembly Press Photographers Group

[Asia Economy Reporter Onyu Lim] "Properties with an actual investment amount in the 50 million KRW range jumped to 70 million KRW on the day the opposition candidates unified their nomination, and now they have soared to 100 million KRW." (An official from real estate agency A in Changdong, Seoul)

As the Seoul mayoral by-election approaches, the election effect that swept through the reconstruction market is spreading to aging detached housing areas outside the Gangnam district. With Oh Se-hoon, the People Power Party candidate, significantly leading Park Young-sun of the Democratic Party in opinion polls, prices of multi-family and row houses within redevelopment promotion zones are skyrocketing. Investors are even flocking to the early redevelopment market where zone designation has not yet been made, raising concerns among some about a 'second New Town frenzy.'

According to the real estate industry on the 26th, since Oh was confirmed as the unified opposition candidate on the 23rd, inquiries from investors seeking low-priced initial redevelopment properties in aging residential areas on the outskirts of Seoul have surged. This is because Oh’s key pledge is to revitalize reconstruction and redevelopment and normalize New Town projects to supply 185,000 housing units. As Oh leads significantly in hypothetical matchups against Park Young-sun, the aging villa market, which had cooled sharply due to concerns over cash settlements for new buyers after the 2·4 measures, has also seen a turnaround in sentiment.

In particular, after Oh announced plans to develop the Changdong area in Dobong-gu into a northern metropolitan hub comparable to Gangnam Station, low-priced properties in this area are showing signs of overheating. Nearby real estate offices explain that properties with a publicly announced price below 100 million KRW, which have an acquisition tax rate of 1.1%, have become scarce. An official from real estate agency A in Changdong said, "Because Oh is very interested in developing Changdong, we receive over 40 inquiry calls a day," adding, "Prices change hourly, and many investors are rushing to make contracts over the phone."

As buying demand surges, housing prices are rising sharply. An official from nearby real estate agency B said, "There is a frenzy of requests for properties everywhere, and now there are no properties with an actual investment amount (purchase price minus deposit) below 100 million KRW," adding, "Since this is the only remaining small-scale investment opportunity in Seoul, customers range from multi-homeowners to young professionals."

The atmosphere in the Guro-dong area is similar. Oh pledged to swiftly relocate the Guro vehicle depot and attract core functions comparable to the Magok district to this area. An official from real estate agency C in this area said, "If he wins, the rise in housing prices is as obvious as seeing fire, so among homeowners, there is a mood to 'hold tight,'" adding, "With properties off the market, villa prices that were in the several tens of millions KRW range for actual investment amounts have risen to 130 million KRW."

The industry expects redevelopment to be revitalized regardless of who wins the mayoral election. In Oh’s case, he has already advocated the need to activate privately led maintenance projects, while Park has also pledged to redevelop low-rise aging residential areas in northern Seoul, albeit under the premise of public-led initiatives.

However, concerns are also emerging that speculative trading might lead to a repeat of the past New Town frenzy. A real estate industry official advised, "In the past, New Town target areas increased rapidly, but as projects were halted, this caused indiscriminate development, resident conflicts, and various side effects," adding, "Investing in ultra-early redevelopment projects with uncertain maintenance plans requires caution."

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