Approval Granted for Remodeling Association Establishment of Jamwon Donga Initiated by Lee Nak-yeon

Prime Complex Just 1 Minute from Banpo Station on Subway Line 7
Plan to Add 146 Households through Vertical Expansion
Strict Safety Review Poses Challenge

[Asia Economy Reporter Onyu Lim] Dong-A Apartment in Jamwon-dong, Seocho-gu, located right in front of Banpo Station on Seoul Subway Line 7, has received approval for the establishment of a remodeling association. This apartment gained fame last year when former Democratic Party leader Lee Nak-yeon sold his unit.

According to the real estate industry on the 10th, Seocho District Office approved the establishment of the remodeling association for Jamwon Dong-A Apartment the day before. The establishment of a remodeling association requires the consent of more than two-thirds of the members.

Built in 2002, this apartment complex consists of a total of 8 buildings with 991 households, composed of small to medium-sized units of 59 and 84㎡ (exclusive area). It faces Banpo Ja-i Apartment across Banpo Station on Subway Line 7.

The floor area ratio is relatively high at 316%. The association plans to vertically extend 2 to 3 floors on each building through remodeling and sell 146 units to the general public. Vertical extension has better business feasibility compared to horizontal extension. However, due to the stringent safety reviews required, there have been almost no cases of vertical extension projects so far. The only complex in Korea that has passed the first and second phases of vertical extension safety reviews is Seongji Apartment in Songpa-dong, Songpa-gu, Seoul.

Prices are on the rise. At the beginning of last month, an 84㎡ unit was traded for 2.43 billion KRW. After fluctuating between 2.3 billion KRW in January and 2.2 billion KRW in April, a record-high transaction was reported following the remodeling association establishment application in June. A representative from nearby A Real Estate Agency said, "The location is excellent, and with the added benefit of remodeling prospects, prices are rising," adding, "Since the association establishment documents were submitted, there are no listings at all, and only buyers are waiting."

Besides Jamwon Dong-A, the number of aging complexes pursuing remodeling in the Gangnam area is increasing. Nearby, 166 households of SinHwa Apartment in Jamwon-dong recently held a general meeting of members for association establishment, and Hyundai Apartment in Daechi-dong, Gangnam-gu, with 630 households, also received approval for association establishment in June.

Unlike reconstruction, remodeling can avoid the excess profit recovery system and strengthened safety inspections, and the project can be initiated after only 15 years from completion. The required period is also shorter, averaging about 6 years compared to 9.7 years for reconstruction. However, uncertainties remain regarding the demolition of load-bearing walls, which determines business feasibility, and low floor heights are considered drawbacks. A real estate industry official said, "As government regulations tighten and the reconstruction boom passes, aging complexes with high floor area ratios or ambiguous conditions are opting for remodeling," adding, "Especially in the Gangnam area, the price increase effect from new construction is significant, leading to a noticeable rise in remodeling projects."

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