"Let's Catch the Last Train for Priority Supply Rights"... Redevelopment Candidate Sites Attracting Speculative Demand

The Cash Settlement Date for Housing Delayed from February 5 to the End of This Month
Investment Demand Concentrates in Key Candidate Areas like Jeungsan 4, Susaek 14, and Hongje-dong
Original Residents Say "Government Encourages Speculation"

[Asia Economy Reporter Ryu Tae-min] As the cutoff date for granting housing occupancy rights in the core urban public housing complex project of the 2·4 Supply Plan has effectively been postponed from February 5 to the end of this month, buying demand is surging in major candidate areas such as Jeungsan 4 District. This is because if buyers purchase homes and complete the transfer registration within about ten days before the related bills pass the National Assembly, they can receive priority apartment supply rights.

According to the industry on the 27th, the cutoff date for granting occupancy rights in the urban public housing complex project, which was originally February 5, was changed to the "date of the National Assembly plenary session resolution" during the bill review process. On the 18th, the National Assembly Land, Infrastructure and Transport Committee amended and approved the revision of the "Special Act on Public Housing," originally proposed by Kim Gyo-heung of the Democratic Party, changing the cutoff date accordingly. The plenary sessions for bill processing in the June extraordinary session are scheduled for June 29 and July 1, so if registration is completed before June 28, occupancy rights can be granted.

A panoramic view of Jeungsan 4 District in Jeungsan-dong, Eunpyeong-gu, Seoul. In this area, a candidate site for the urban public housing complex development project, there is a rush of last-minute buying before the cash settlement cutoff date. (Photo by Ryu Taemin)

"Catching the Last Train for Priority Supply Rights"... Investment Demand Floods Redevelopment Candidate Sites

In this process, investment demand is pouring into candidate sites for the urban public housing complex project. In Jeungsan 4 District, Eunpyeong-gu, Seoul, which has secured more than two-thirds resident consent, investment inquiries have flooded since the announcement of the cutoff date. The head of real estate office A in this area said, "As soon as the announcement was made on the 16th, inquiries from quick-witted investors started pouring in," adding, "Currently, nearly 10 transactions are underway at our office."

As demand surged, share prices also rose significantly. A representative from real estate office B in the area said, "With rising development expectations, prices have increased sharply," adding, "Since occupancy rights can be obtained regardless of the size, houses of about 10 pyeong (approximately 33 square meters) that were previously priced in the low 100 million KRW range are now trading at 500 to 600 million KRW." Jeungsan 4 District was selected as the first candidate site for the urban public housing complex development project by the government in March and secured the required two-thirds resident consent within just one month, showing the fastest progress among candidate sites.

At a similar time, Susaek 14 District nearby, which also secured more than two-thirds resident consent, experienced the same situation. The head of real estate office C in the area said, "After the announcement, dozens of homeowners called saying they wanted to sell their properties," adding, "There are so many buyers that currently available properties are sold out."

On the 23rd, investment demand surged in the low-rise residential area on the west side of Goeunsan, Hongje-dong, Seodaemun-gu, announced as the fifth candidate site for the urban public housing complex development project. A representative from real estate office D in the area said, "Since the period to receive priority supply rights is running out, everyone is rushing to buy and sell," adding, "We received about 30 inquiries for properties in just one day."

Original Residents: "The Government Has Effectively Encouraged Speculation"

On the other hand, most residents expressed dissatisfaction with this measure. This is because the more new homeowners, i.e., union members, increase, the lower the expected profits become. Existing multi-homeowners receive only one occupancy right even if they own multiple houses. However, if multi-homeowners transfer their houses under different names as is happening now, the number of occupancy rights to be distributed after development increases. Since profits from general sales are distributed proportionally to the number of residents, the actual benefits returning to existing residents are decreasing.

Resident B, who has lived in Jeungsan-dong for over eight years, said, "Isn't it fair that only residents who owned houses before receive occupancy rights?" expressing anger, "Speculators have already bought all the houses, so what is the point of setting a cash settlement cutoff date afterward?"

Song Seung-hyun, head of Urban and Economy, said, "Although the cutoff date for occupancy rights was postponed to the time of plenary session approval, the legislative process could be prolonged, and contracts could be made in a short period," adding, "It is regrettable that this aspect was overlooked and sufficient prior review was not conducted, leading to the influx of speculative demand."

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