From Today, Gap Investment Banned in Apgujeong, Yeouido, and Mokdong... Last-Minute Record Highs Surge

Land Transaction Permit System Enforced in Seoul from the 27th
2-Year Residency Requirement Makes Jeonse and Monthly Rent Leasing Impossible
Record Prices Surge in Apgujeong Miseong 2nd Complex, Mokdong 2nd Complex, and More

Apartment complexes in Yeouido as seen from the 63 Art Observatory in Seoul.
[Image source=Yonhap News]

[Asia Economy Reporter Onyu Lim] The areas of Apgujeong-dong in Gangnam-gu, Yeouido-dong in Yeongdeungpo-gu, Mok-dong in Yangcheon-gu, and Seongsu-dong in Seongdong-gu, Seoul, have been designated as land transaction permission zones starting from the 27th.

In land transaction permission zones, when purchasing real estate with a land share exceeding a certain area, permission must be obtained from the head of the relevant district office. In the case of housing, there is a two-year residency obligation, making it impossible to rent out as jeonse or monthly rent. In other words, 'gap investment,' which involves buying with a lease for investment purposes, is not allowed.

Accordingly, from the announcement of the designation of the land transaction permission zones by the Seoul Metropolitan Government on the 21st until the 26th, last-minute record-high transactions were actively conducted.

According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system, Misung 2nd Complex in Apgujeong-dong (exclusive area) 140.9㎡ changed hands on the 23rd for 3.98 billion KRW (12th floor). Compared to the previous highest price recorded at the end of January (3.46 billion KRW, 5th floor), the price rose by 520 million KRW in three months. This complex, which belongs to District 1 (Misung 1st and 2nd Complex) among the six special planning zones in Apgujeong, is currently pursuing the establishment of a union.

Mok-dong New Town 2nd Complex 95.67㎡ also set a new record on the same day by being traded for the first time at 2 billion KRW (10th floor). Additionally, 122.31㎡ signed a contract on the 25th for 2.35 billion KRW (5th floor), surpassing the previous highest price of 2.225 billion KRW (3rd floor) recorded in September last year. A representative from Mok-dong A Real Estate Agency (hereafter referred to as the agency) said, "As the buyers who were only looking for urgent sales became more anxious, more than 10 transactions occurred over the weekend," adding, "Whenever a contract was signed, it was at a record high, showing fierce competition among buyers."

Furthermore, in Seongsu-dong, the Seongsu Strategic Maintenance Zone also saw last-minute purchase inquiries and transactions continuing through the past weekend and the day before. In the highly popular Seongsu 1 District, investment amounts jumped from around 1.8 billion KRW before the designation of the land transaction permission zone to over 2 billion KRW just before enforcement.

The head of D Real Estate Agency, specializing in redevelopment in Seongdong-gu, stated, "Until yesterday, last-minute purchase inquiries and transactions were active in the Seongsu Strategic Maintenance Zone," and introduced, "In the most popular Seongsu 1 District, the investment amount was around 1.8 billion KRW before the designation of the land transaction permission zone, but just before enforcement, it became difficult to find properties under 2 billion KRW."

Meanwhile, Seoul Mayor Oh Se-hoon expanded the land transaction permission system to defend against rapid housing price increases ahead of normalizing reconstruction. However, opinions differ on whether this trend will ease the rise in housing prices. Depending on the effectiveness of the land transaction permission system implemented in major reconstruction complexes, there is also a possibility that Mayor Oh will adjust the pace by easing regulations or establishing district unit plans. Jang Jaehyun, head of Real Today, said, "Due to the strict permission requirements, transaction volumes will decrease, but as the reconstruction signal becomes clearer, prices may actually rise further."

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