One in Four Seoul Apartments Over 30 Years Old... 'Reconstruction Speed Race' Faces One Challenge After Another

Ministry of Land, Infrastructure and Transport "Will Increase Housing Supply in Urban Areas"
Concentration of Apartments Over 30 Years Old in Nowon-gu and Dobong-gu
No Effect if 'Reconstruction Fast Track' Has Low Feasibility
Passing of 'Urban Maintenance Act Amendment' Difficult Due to Opposition Party Resistance

The number of autonomous districts in Seoul where the average apartment sale price exceeds 50 million KRW per 3.3㎡ has more than doubled in one year. As of November last year, only Gangnam-gu, Seocho-gu, and Songpa-gu among the 25 autonomous districts in Seoul had average apartment sale prices exceeding 50 million KRW per 3.3㎡, but last month, Yongsan-gu, Seongdong-gu, Mapo-gu, and Gwangjin-gu were added, making a total of seven districts. The photo shows the view of Seoul apartments from 63 Square. Photo by Kim Hyunmin kimhyun81@

One in four apartments in Seoul is over 30 years old. The government announced that apartments over 30 years old can begin reconstruction procedures without safety inspections. This is a policy aimed at increasing housing supply in urban areas.

According to a survey by Real Estate R114 on the 14th, among the 12.32 million apartments nationwide, 2.62 million units, or 21.2% of the total, are in complexes that have been completed for more than 30 years as of January.

In Seoul, 27.5% of the 1.827 million apartments are over 30 years old. The proportion of apartments over 30 years old was high in Nowon-gu (59%, 96,000 units) and Dobong-gu (57%, 36,000 units). Gangnam-gu (39%, 55,000 units) and Yangcheon-gu (37%, 34,000 units) followed.

In Gyeonggi Province, apart from the first-generation new towns eligible for the Special Act on Aging Planned Cities, many apartments over 30 years old are found in Gwangmyeong (41%, 32,000 units), Ansan (34%, 41,000 units), Suwon (13.6%, 41,000 units), and Pyeongtaek (12.9%, 21,000 units).

There are also 1.99 million apartments nationwide (16%) that are 26 to 30 years old. With the introduction of the government's announced reconstruction fast track, 4.6 million apartments, accounting for 37% of apartments nationwide within the next five years, will be able to undergo reconstruction without safety inspections.

Rising Construction Costs and Interest Rates Raise Questions About Reconstruction Feasibility

Eliminating the safety inspection, the first hurdle in reconstruction, could speed up the initial progress of projects. However, reconstruction can only proceed if the project is economically viable. The bill must also pass the National Assembly for the fast track to be implemented.

However, if the redevelopment project is not economically viable, the burden on association members increases, internal conflicts arise, and the project may face setbacks. The construction industry analyzes that the remaining reconstruction complexes cannot significantly increase floor area ratios, construction costs have skyrocketed, and rising interest rates have lowered profitability.

There are calls to either postpone the reconstruction surplus profit recovery system to accelerate overall reconstruction progress or to shift to high-density mixed-use projects.

On the 5th, from the observation deck of Lotte World Tower in Songpa-gu, Seoul, where apartment prices and jeonse prices continue to rise without turning downward, Songpa-gu apartments are being observed. Photo by Jinhyung Kang aymsdream@

Opposition Party Criticizes as "House Price Inflation"... Bill Passage Difficult

Passing the law is another hurdle. To introduce the government's announced 'reconstruction fast track,' the 'Urban Maintenance Act Amendment' must be passed by the National Assembly. The Ministry of Land, Infrastructure and Transport announced it will submit the amendment to the National Assembly next month.

However, the opposition party, the Democratic Party of Korea, holds a negative stance. Regarding the government's easing of reconstruction regulations, they said, "Reckless deregulation of redevelopment and reconstruction not only inflates house prices but also violates the purpose of the Urban Maintenance Act, which prioritizes safety. It is problematic to announce policies impulsively without any communication with the opposition, even though this clearly requires legal amendments."

Moreover, with the April general election approaching, it is difficult for the National Assembly's Land, Infrastructure and Transport Committee to review and process the bill. If the bill is not passed before the 21st National Assembly's term ends on May 30, it will be automatically discarded. In that case, the government will have to resubmit the bill to the 22nd National Assembly. If the current 'minority ruling' situation continues after the election, passing the bill may become even more difficult.

Last year on January 3, the government announced it would abolish the residency obligation for houses under the price ceiling system. However, the amendment to the Housing Act required for this failed to pass the National Assembly.

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