"Reconstruction Approved" Land Transaction Permission System D-1... Rapidly Decreasing Listings Due to 'Last-Minute Demand'

Yeouido Miseong Listings Decrease from 41 to 33 in Five Days
Surge in Record Transactions as Buyers Rush Before Regulations
Homeowners Withdraw Listings Amid Reconstruction Expectations

[Image source=Yonhap News]

[Asia Economy Reporter Onyu Lim] "As buyers who were only looking for quick sales become more urgent, more than 10 transactions have taken place over the weekend. Every time a contract is signed, it sets a new record price." (A representative from a real estate agency in Mokdong, Yangcheon-gu, Seoul)

On the eve of the implementation of the Land Transaction Permission System, apartment listings in Apgujeong-dong, Gangnam-gu; Yeouido-dong, Yeongdeungpo-gu; and Mokdong, Yangcheon-gu in Seoul are rapidly decreasing. While buyers are rushing to make last-minute contracts to avoid regulations, homeowners are withdrawing their listings due to expectations of reconstruction. As demand increases in the short term and supply decreases, record-breaking transactions are occurring frequently.

According to Apartment Real Transaction Data, a real estate big data company, as of the 26th, the number of apartment listings in Yeouido-dong is 411, down by 33 listings (7.4%) from 444 listings on the 21st, when the designation of the land transaction permission zone was announced. In particular, the Misung Apartment, which passed the preliminary safety inspection for reconstruction in January, saw its listings drop from 41 to 33 in just five days, a decrease of 8. The pilot apartment where Seoul Mayor Oh Se-hoon appealed to President Moon Jae-in about the urgency of reconstruction also saw a decrease from 51 to 44 listings.

Similar trends are appearing in Mokdong and Apgujeong-dong, which will also be designated as land transaction permission zones starting the 27th. The Mokdong New Town 14 Complex, which conditionally passed the first reconstruction safety inspection, saw listings decrease from 48 to 44. The nearby 1 Complex also dropped from 19 to 15 listings. In Apgujeong-dong, where available listings are limited due to recent successive establishment of associations, the decline is even more pronounced. For example, Hyundai 14th Complex in District 3 saw listings fall from 32 to 22.

Once designated as a land transaction permission zone, purchasing real estate with a residential land share exceeding 18㎡ or commercial land share exceeding 20㎡ requires permission from the district office chief. For housing, a two-year actual residence obligation is imposed after purchase, making 'gap investment'?buying a house with a lease?impossible. This has led to concentrated short-term demand to close contracts before the regulation, causing a sharp decrease in listings in the area.

In fact, more than 10 contracts were reportedly signed over the weekend in Mokdong. A representative from Mokdong A Real Estate Agency said, "Since gap investment will be impossible once the land transaction permission zone is designated, buyers waiting to purchase seem to have become desperate," adding, "Inquiries surged on Friday and Saturday, and two transactions occurred in Complex 1 alone."

The expectation of reconstruction, which leads homeowners to withdraw their willingness to sell, is also a cause of the decrease in listings. Mayor Oh previously stated that the land transaction permission system is being implemented as a preemptive measure to cope with the rapid rise in housing prices due to reconstruction activation. A representative from Yeouido B Real Estate Agency explained, "Homeowners are interpreting the land transaction permission system as a sign of reconstruction and are withdrawing their listings," adding, "There are still buyers, but transactions are not happening easily."

As demand concentrates while supply decreases, asking prices continue to rise. For example, a pilot apartment in Yeouido-dong and Mokdong with an exclusive area of 118㎡ reportedly traded at 2 billion KRW higher than the previous high price on the day the regulation was announced, at 2.6 billion KRW.

Jang Jaehyun, head of Real Today, said, "Once designated as a land transaction permission zone, gap investment becomes impossible, and procedures such as submitting contract permission applications and land acquisition fund plans become complicated, causing last-minute buying to surge," adding, "Although transaction volume will decrease going forward, the clear development signals will likely push prices even higher."

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