"Up 6 Times"... Will Seongsu-dong Become a 'Land Transaction Permission Zone'?

AmorePacific Deal Hits 250 Million KRW per Pyeong
Jung Won-oh "Pushing for Land Transaction Permission Zone Designation"
"Speculative Phenomenon Negatively Impacts Seongsu's Future"
Plans to Link with Seongsu Industrial District Unit Next Year

Jung Won-oh, Mayor of Seongdong-gu (photo), expressed concern over the rapid increase in land prices on Yeonmujang-gil in Seongsu-dong, stating on the 26th, "We are promoting the designation of a land transaction permission zone for certain areas of Seongsu-dong." Mayor Jung is explaining the gentrification prevention policy. (Photo by Seongdong-gu Office)

As an ultra-high-priced land transaction of 250 million KRW per pyeong emerged in Seongsu-dong, Seoul, Seongdong-gu has begun pushing to designate the entire Seongsu-dong area as a land transaction permission zone.

On the 26th, Jung Won-oh, mayor of Seongdong-gu, told reporters, "The land price on Yeonmujang-gil in Seongsu-dong, which reached 100 million KRW per pyeong just a few years ago, recently surpassed 150 million and 200 million KRW consecutively, and now there is a case where it was sold for 250 million KRW per pyeong," adding, "I think this is a very speculative phenomenon."

Mayor Jung explained, "This trend causes a rapid rise in land prices and rents in the area and is negative for the future of Seongsu-dong in the long term," and said, "We will fully consult and request with the Seoul Metropolitan Government to have Seongsu-dong designated as a land transaction permission zone."

A land transaction permission zone is designated to prevent speculation in areas where land prices are rapidly rising or expected to rise sharply. When the Minister of Land, Infrastructure and Transport or the Mayor of Seoul designates an area as such, land within the zone cannot be traded without permission from the head of the local government in charge.

The case Mayor Jung referred to involves Amorepacific. In May, Amorepacific purchased a building on Yeonmujang-gil in Seongsu-dong, consisting of basement level 1 to 3 floors above ground (land area 419㎡, total floor area 711㎡), for 31.7 billion KRW. This equates to a purchase price of 250 million KRW per pyeong (3.3㎡).

Yeonmujang-gil in Seongsu-dong is considered a core commercial area within Seongsu-dong, but transactions exceeding 200 million KRW per pyeong were rare until now. Particularly, land prices on this street were around 40 million KRW per pyeong in 2016, meaning they have increased sixfold over seven years. Until two to three years ago, prices were below 100 million KRW per pyeong.

Mayor Jung's concern is that competitive entry by large corporations will cause Seongsu-dong to follow the same path as Garosu-gil in Sinsa-dong, experiencing gentrification (a phenomenon where tenants are driven out due to rising rents).

Seongsu-dong was selected as an urban regeneration project site in 2014, attracting young people, and since 2015, Seongdong-gu has implemented Korea’s first gentrification prevention policies around Seoul Forest-gil and Sangwon-gil, shaping Seongsu-dong as it is today. Mayor Jung persuaded landlords with the phrase "Let's not cut open the belly of the goose that lays golden eggs," signing agreements to stabilize rents and blocking franchise and large corporation entries.

However, as land prices continued to rise and commercial areas developed, signs of gentrification appeared throughout Seongsu-dong, including Seongsu Station and Yeonmujang-gil. In February, Seongdong-gu announced an upgraded 'Gentrification Prevention Policy 2.0.' Following a local survey that found frequent cases of illicit rent increases, in August, the 'Sustainable Development Zone,' previously designated only around Seoul Forest-gil and Sangwon-gil, was expanded to cover the entire Seongsu-dong area to protect local commercial districts.

Mayor Jung stated, "Early next month, we will issue a joint statement urging the amendment of the three gentrification prevention laws, hosted by the Gentrification Prevention Local Government Council, and next year, we will establish a sustainable development plan linked to the Seongsu Industrial District Unit Plan."

On the same day, Mayor Jung toured the site of the former Sampyo Remicon in Seongsu-dong, which has been converted into a temporary performance hall and parking lot, as well as smart smoking booths and Understand Avenue, with reporters.

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