"The 'One-Week Deregulation' Effect by Oh... Seoul Redevelopment and Reconstruction 'Stirred Up'"

Surging Investment Inquiries in Yeouido, Apgujeong, Seongsu Amid Opposition Unity
Early Districts Like Changdong, Gurodong Without Redevelopment Zones Also See Sharp Value Rise
Up to 50-Story Height Allowed Along Han River, Promises to Revitalize Reconstruction and Redevelopment

[Image source=Yonhap News]

[Asia Economy Reporter Onyu Lim] As the April 7 by-election approaches, the selection of Oh Se-hoon, the People Power Party candidate, as the unified opposition candidate for Seoul mayor has raised expectations for reconstruction along the Han River, Gangnam, Mok-dong, and redevelopment in the non-Gangnam areas, which had cooled rapidly after the 2·4 measures due to regulatory barriers. As Oh's support rate significantly surpasses that of Park Young-sun, the Democratic Party candidate, the market is responding first to his pledge to "completely lift reconstruction and redevelopment regulations within a week" if he takes office as Seoul mayor.

◆ "Regulations will be lifted within a week"... High hopes for Han River and Gangnam reconstruction = According to the real estate industry on the 28th, since Oh was confirmed as the unified opposition candidate on the 23rd, inquiries about reconstruction investments in Apgujeong-dong, Gangnam-gu, Yeouido-dong, Yeongdeungpo-gu, Seongsu-dong, Seongdong-gu, and Mok-dong, Yangcheon-gu have surged sharply. This is because Oh's key campaign promise for the April 7 Seoul mayoral by-election is housing supply through revitalizing private redevelopment and reconstruction. A maintenance industry official said, "Expectations for reconstruction in Jamsil 5-danji, Mok-dong, and Yeouido, which had been delayed since former Mayor Park Won-soon's inauguration, have greatly increased," adding, "Investors are already acting on the assumption that Oh will win."

Amid the excitement across all Seoul maintenance project zones, reconstruction along the Han River is especially seen as the biggest beneficiary. This is because Oh announced he would abolish the '35-floor height limit along the Han River,' a key regulation of former Mayor Park, and allow up to 50 floors. Oh is expected to restart the 'Han River Renaissance' project, which was halted due to his dishonorable resignation as Seoul mayor.

A representative from real estate agency A in Apgujeong-dong said, "Even listings with prices that seem excessively high are being absorbed." In fact, a 196㎡ (exclusive area) unit in Hyundai 1st complex was traded for 6.3 billion KRW on the 15th, rising by 1.15 billion KRW from the previous highest price of 5.15 billion KRW last month.

Yeouido, where maintenance projects were virtually halted due to the suspension of former Mayor Park's master plan, shows a similar atmosphere. A representative from real estate agency B in Yeouido-dong said, "As reconstruction has become a hot issue in the Seoul mayoral election, many homeowners are withdrawing their listings," adding, "They plan to decide definitively on selling after the election results."

The Seongsu Strategic Maintenance Zone, known as Oh's 'legacy' during his previous term as Seoul mayor, also welcomes his selection. This area was designated for redevelopment up to 50 floors under Oh's Han River Renaissance plan but was delayed after former Mayor Park's inauguration. There are expectations that Oh will quickly push forward development here as part of erasing Park's legacy. In fact, Oh announced the 'Speed Housing Supply Phase 1' in the Seongsu Strategic Zone.

However, some caution that premature expectations should be avoided since it is difficult for the city to lift reconstruction regulations without government cooperation. Kim Deok-rye, senior researcher at the Korea Research Institute for Human Settlements, said, "To build the Han River skyline of the global city Seoul, the 35-floor regulation must be lifted," but added, "Many aspects of reconstruction regulation easing exceed the mayor's authority, so it is questionable whether cooperation from the central government can be obtained."

◆ Early redevelopment market, which had a 'transaction cliff' after the 2·4 measures, also booming = The election effect has spread not only to the reconstruction market but also to the non-Gangnam redevelopment market. The old villa market, which had cooled sharply due to concerns over cash settlement for new buyers after the 2·4 measures, is experiencing a turnaround. Investors are even flocking to the early redevelopment market where district designation has not yet been made.

In particular, after Oh announced plans to develop the Chang-dong area in Dobong-gu as a northern metropolitan area hub similar to Gangnam Station, low-priced listings in the area are showing signs of overheating. Nearby real estate agencies explain that properties with official prices under 100 million KRW, which have an acquisition tax rate of 1.1%, have dried up. A representative from real estate agency C in Chang-dong said, "Because Oh is very interested in developing Chang-dong, we receive over 40 inquiry calls a day," adding, "Properties with actual investment funds around 50 million KRW rose to 70 million KRW on the day of the opposition candidate unification announcement and have now jumped to over 100 million KRW."

The atmosphere in Guro-dong is similar. Oh pledged to swiftly relocate the Guro vehicle depot and attract core functions comparable to the Magok district in the area. A representative from real estate agency D in this area said, "If he wins, house prices will obviously rise, so among homeowners, there is a mood of 'hold tight,'" adding, "As listings have been locked up, villa prices, which were at several tens of millions of KRW in actual investment funds, have risen to 130 million KRW."

However, concerns are also emerging that speculative trading may lead to a repeat of the past New Town frenzy. A real estate industry official said, "In the past, New Town target areas increased rapidly but projects were halted, causing indiscriminate development, resident conflicts, and various side effects," advising, "Investments in ultra-early redevelopment with uncertain maintenance plans should be approached cautiously."

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