Even with a Remodeling Boom in Ilsan... Six Years of Silence on Load-Bearing Wall Regulation Easing

Securing Consent Rate for Munchon 16 Complex... Remodeling Accelerates
Asking Prices Soar Despite Metropolitan Area Housing Price Slowdown
High Floor Area Ratio Sparks Interest in 1st Generation New Town Remodeling
Load-Bearing Wall, Key to Project Activation, Under Review for 6 Years
Goyang, Seongnam, Bucheon Jointly Respond to Regulatory Easing

Following Bundang and Pyeongchon, the 'remodeling wave' is spreading to Ilsan New Town, which had been a remodeling-free zone among the first-generation new towns in the Seoul metropolitan area. Remodeling is considered less regulated compared to reconstruction, and recently, various local governments have been providing policy support to revitalize it, leading to an increasing number of complexes opting for remodeling instead of reconstruction. In fact, in some areas like Ilsan, remodeling initiatives are being seen as a positive factor, contributing to a rebound in previously stagnant housing prices.

However, there are concerns that the lack of resolution on easing the 'load-bearing wall demolition' regulation, a key factor for remodeling activation, which has remained undecided for about six years, is becoming an obstacle to project advancement. Remodeling is difficult to pursue if load-bearing wall demolition is not permitted, as it hampers structural improvements and profitability. Especially in aging first-generation new towns, calls for relaxing such regulations are growing louder.

Remodeling Breeze... Housing Prices Rise

According to the real estate industry on the 21st, remodeling projects are gaining momentum in aging apartment complexes around Ilsan, a first-generation new town. In Juyop-dong, Ilsan Seo-gu, the Moonchon 16 Complex New Samik has secured resident consent for establishing a remodeling housing association and plans to hold the inaugural general meeting in January next year. Nearby complexes such as Gangseon 14 Complex Doosan, Daehwa-dong Jangseong 2 Complex Daemyung, and Ilsan-dong Hugok 11 and 12 Complex Jugong are also actively pursuing remodeling.

As attempts to improve residential environments through remodeling, which takes less time and costs less than reconstruction, increase, the real estate market in the Ilsan area is also showing signs of vitality. For example, the 86㎡ (exclusive area) unit in Moonchon 16 Complex New Samik was traded at a record high of 788 million KRW in October and is currently listed between 800 million and 850 million KRW. This atmosphere contrasts somewhat with the increase in urgent sales across the metropolitan area due to tightened loan regulations and widespread perceptions of housing price peaks.

Apartment complex view around KINTEX, Ilsan, Goyang-si, Gyeonggi-do [Image source=Yonhap News]

First-Generation New Towns, Remodeling Expectations

Unlike reconstruction, which requires demolishing and rebuilding, remodeling maintains the basic framework of the building, making it advantageous in terms of project duration and construction costs. Reconstruction can only be pursued 30 years after completion, but remodeling can be initiated after just 15 years, and the safety inspection requirement is less stringent, requiring only a B grade or higher. Notably, the stages of project implementation and management disposition approval required for reconstruction are omitted, allowing for faster progress.

Consequently, there is particularly strong interest in remodeling centered on first-generation new towns developed since 1989. As aging apartment complexes around the 30-year mark increase, there is a growing desire to improve water and sewage systems, parking spaces, and internal facilities. However, with an average floor area ratio of 198%, pursuing reconstruction is difficult, leading attention to turn to remodeling.

A construction industry official explained, "If remodeling is activated in first-generation new towns, it could help disperse housing demand in the metropolitan area and contribute to market stabilization."

When Will Regulation Easing Come?... Government Remains Silent

However, government regulations surrounding remodeling remain relatively strict, posing obstacles to market activation. The Ministry of Land, Infrastructure and Transport has made regulatory improvements this year to facilitate secondary safety reviews for vertical extension remodeling by allowing specialized institutions to act as authorized bodies for new technologies and methods. Yet, the crucial easing of load-bearing wall demolition remains 'completely silent,' causing dissatisfaction within the industry.

If load-bearing wall demolition is permitted, old 2-3 bay apartments (Bay refers to the number of living rooms and rooms adjacent to balconies) can be converted into 3-4 bay layouts, significantly enhancing marketability. The Ministry announced a partial allowance policy for load-bearing wall demolition in January 2016 but suspended it in August of the same year and has yet to reach a conclusion for about six years.

Although load-bearing wall demolition is directly related to safety, the Korea Institute of Civil Engineering and Building Technology, which conducted related research, concluded that partial demolition is possible. This has led to opinions that the government's delay may be a policy tactic to prevent overheating of housing prices.

Regions such as Goyang, Seongnam, Bucheon, Anyang, and Gunpo have also set plans to jointly respond to the government to ease remodeling regulations. On the 10th, Seongnam Mayor Eun Su-mi stated at the first-generation new town revitalization win-win agreement ceremony, "In many first-generation new towns, associations and promotion committees are independently formed to attempt remodeling and reconstruction, but there are limitations under the current legal framework."

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