"Will Mapo and Seongdong Be Restricted Soon?"... Land Transaction Permit Zones to Be Designated by the Ministry [Real Estate AtoZ]

Chun Junho Proposes Bill Just Before September 7 Supply Measures Announcement
Ruling Party Leads Legislation...Possible Passage in National Assembly Within 1-2 Months

A bill has been proposed to expand the authority to designate land transaction permit zones from local governments to the Ministry of Land, Infrastructure and Transport. As ruling party lawmakers move quickly to legislate in line with the direction outlined in the government's September 7 supply measures, there are expectations that the system could be changed within two months.

According to the real estate industry and the National Assembly on September 8, Chun Junho, a member of the Land, Infrastructure and Transport Committee from the Democratic Party, submitted a partial amendment to the “Act on Report of Real Estate Transactions, etc.” on September 5, together with 10 other lawmakers from the same party. The bill was proposed just before the government announced its supply measures, signaling the intention of both the government and the ruling party to actively use land transaction permit zones as a tool to curb market overheating.

The amendment expands the authority of the Minister of Land, Infrastructure and Transport to designate land transaction permit zones even for overheated areas within the same city or province. Under the current law, the minister can only designate such zones in areas spanning two or more cities or provinces. Even if housing prices surge within Seoul, only the mayor of Seoul can currently impose regulations; this amendment would allow the minister to directly designate such zones as well.

Currently, the Ministry of Land, Infrastructure and Transport can only intervene in exceptional cases, such as national development projects. For example, the Yongsan Rail Yard site was designated as a land transaction permit zone by the ministry because it was a national project. In contrast, for major redevelopment areas such as the three Gangnam districts, Yongsan, Apgujeong, Yeouido, Mokdong, and Seongsu (collectively known as “Ap-Yeo-Mok-Seong”), the authority to designate permit zones lies with the Seoul Metropolitan Government.

Apartment complexes in downtown Seoul as seen from Namsan, Seoul. Photo by Yonhap News Agency

If the ministry gains the authority to designate zones within the same city or province, it will be able to immediately restrict areas with rapidly rising housing prices without having to consider the stance of local governments. This makes it clear that the government intends to use land transaction permit zones as a decisive anti-speculation measure, alongside adjusted target areas and speculative overheating zones. In particular, land transaction permit zones are distinct from other regulated areas because they impose a two-year mandatory residency requirement upon purchase, effectively blocking gap investments involving lease contracts.

In the September 7 measures, the government announced plans to strengthen regulations within land transaction permit zones by requiring not only a funding plan but also supporting documents for housing transactions exceeding 600 million won. The aim is to enhance the effectiveness of the regulations.

Since the ruling party, which holds a majority in the National Assembly, has proposed the bill, it is expected to pass within one to two months. Once the law is enacted, the Ministry of Land, Infrastructure and Transport plans to monitor price and transaction trends in non-Gangnam areas to determine whether to exercise the minister’s authority to designate zones. Seongdong-gu and Mapo-gu, which are currently unregulated, are being mentioned as top priorities.

Recently, apartment prices in Seongdong-gu and Mapo-gu rose by 0.20% and 0.12%, respectively, with the pace of increase accelerating. Although parts of the Seongsu-dong strategic redevelopment zone are already designated as land transaction permit zones, many high-priced mixed-use complexes and regular apartments are still excluded. Notably, major “Han River landmark” complexes such as Galleria Foret, Acro Seoul Forest, and Trimage remain outside the scope of regulation.

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