Daechi, Samsung, Cheongdam, Jamsil, Land Transaction Permission System Lifted Except for Apartments

Seoul City Lifts Land Transaction Permit Zone for Non-Apartment Areas in 4 Districts
Purchase of Townhouses, Multi-Family Houses, Villas, and Commercial Buildings with Jeonse Possible
"Apartment Regulations Remain, High Interest Rates Limit Market Impact"

From now on, only apartments in Daechi, Samsung, and Cheongdam-dong in Gangnam-gu, Seoul, and Jamsil-dong in Songpa-gu will be subject to land transaction permit regulations. Commercial buildings, offices, detached houses, and multi-family houses such as row houses and villas will no longer require separate permits, allowing for freer transactions. However, since regulations on apartments remain in place and transactions are shrinking due to the impact of high interest rates, the overall effect on the market is expected to be limited.

Seoul City announced on the 15th that the 'Land Transaction Permit Zone Adjustment Plan' containing these details was approved at the Urban Planning Committee meeting. The regulation will take effect from the 16th. The land transaction permit zone system requires obtaining permission from the district mayor or other local government heads when trading land, houses, or commercial properties in areas where speculative transactions are rampant or rapid price increases are a concern. In particular, those who purchase houses in land transaction permit zones must reside in them for two years after the sale, making 'gap investment' involving jeonse (long-term deposit lease) impossible.

Before adjusting the land transaction permit zones, the city carefully reviewed whether to include foreigners, land categories, and building uses separately. Regarding the distinction of permit subjects, it was found that foreigners rarely acquired land through land transaction permits, indicating no unusual speculative trends. The proposal to designate zones based on specific land categories was deemed ineffective and thus maintained as is.

After focusing on the option to designate zones by specific uses, the city judged that the International Exchange Complex District and nearby areas are comprehensively designated within the legal dong boundaries adjacent to the project area, making them subject to adjustment according to the purpose of the legal amendment. Considering overall transaction volumes by indicators and uses, it was decided to designate land transaction permit zones limited to apartment use.

Additionally, the city decided to lift land transaction permit zones for 40 redevelopment candidate sites that were not selected in the rapid integrated planning and other redevelopment candidate site contests. Since January last year, to activate housing supply, areas that met legal zone designation requirements and resident consent rates and were recommended by autonomous districts but not selected had been designated as land transaction permit zones to prevent speculation. However, there have been criticisms that residents experienced inconvenience due to long-term designation as permit zones despite uncertainty about future candidate site selection.

Yoo Chang-soo, Seoul City's Deputy Mayor for Administration 2, said, “This adjustment of land transaction permit zones is a rational improvement considering the legal amendment and unselected sites comprehensively,” adding, “We will continue to monitor the real estate market and observe real estate trends (stability) throughout Seoul, including land transaction permit zones.”

However, experts predict that the immediate impact on Seoul's real estate market will not be significant since apartments were excluded from this lifting. Park Won-gap, Senior Real Estate Specialist at KB Kookmin Bank, said, “There may be some relief in the currently sluggish commercial real estate market,” but added, “Since the most demanded apartments are excluded and overall transactions are shrinking due to high interest rates, the impact on the real estate market will be limited.” He further noted, “Especially for villas, issues such as jeonse fraud exist, and it is difficult to match jeonse prices, so lifting the permit system is unlikely to have a significant effect.”

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