Gangnam 3 Districts and Yongsan Land Transaction Permit Zones Extended... Why the Period Was Set Longer Than a Year [Real Estate AtoZ]

Typically Designated for One Year, This Time Extended to an Unusual 15 Months
Urban Planning Committee Suggests Reassessment During Market Stabilization
Additional Designation of Mapo and Seongdong Excluded from This Review

The Seoul Metropolitan Government has re-designated apartment land use areas in Gangnam, Seocho, Songpa, and Yongsan districts as Land Transaction Permission Zones, setting the period until the end of next year. This measure aims to prevent the risk of overheating in the market, as localized price increases have continued even after the June 27 loan regulations. The decision to extend the designation period to one year and three months-nine months longer than the previous period-reflects the assessment that stabilizing the market in a short time frame would be difficult.

Yonhap News Agency

On the 17th, the Seoul City Urban Planning Committee discussed the agenda of re-designating the Land Transaction Permission Zones in Gangnam 3 Districts and Yongsan District, which are set to expire at the end of this month. Previously, it was common to designate these zones for periods of six months or one year, but this time was different. A Seoul city official explained, "It was not initially intended to set the period at one year and three months," adding, "During the committee review, it was deemed more appropriate to decide on re-designation at the end of the year, when the market is relatively stable."

Since the designation of the Land Transaction Permission Zones in March this year, the city has held meetings with the Ministry of Land, local districts, and consulted with real estate and financial experts to analyze the market and conduct on-site monitoring. Seoul City stated, "This re-designation in Gangnam 3 Districts and Yongsan District is an unavoidable measure to protect the housing stability of genuine end-users."

The city chose not to introduce new variables until the end of next year. Despite strong measures such as the June 27 policy, which limited mortgage loans to 600 million won and banned jeonse loans before the transfer of ownership, apartment prices have remained stubbornly high. This is because it is difficult to increase supply in the short term, and expectations of interest rate cuts are also influencing the market, leaving room for market reactions at any time. Since the inauguration of the Lee Jaemyung administration, apartment transaction volume in Seoul has steadily increased, reaching 10,905 cases as of June, but after the loan regulations, the number of transactions plummeted to around 3,000.

An official from D Realty near Banpo-dong, Seocho District, said, "With the designation as a Land Transaction Permission Zone and the implementation of loan regulations, it is almost impossible to get a loan except for actual occupancy, so transactions are virtually nonexistent. Prices have risen so much, but there is no willingness to lower them even in the absence of transactions, so it will likely be difficult to ease the Land Transaction Permission Zone regulations easily."

Status of Re-designation of Toheo District in Gangnam 3 Districts and Yongsan District. Provided by Seoul City

In the Gangnam area, transactions setting new record-high prices continue to occur. The 127-square-meter unit at Gaepo Woosung 1st Complex was traded at 5.3 billion won at the end of last month, 250 million won higher than the previous transaction. The 138-square-meter unit at Dogok Rexle was sold for 4.7 billion won on the 13th, also setting a new record. The 84-square-meter unit at Sinbanpo Cheonggu changed hands for 3.35 billion won on the 23rd of last month, 150 million won higher than the previous record. The 27-square-meter unit at Jamsil LECENS was traded for 1.6 billion won on the 13th, 5 million won higher than the previous record.

On this day, the option to additionally designate Mapo and Seongdong districts as Land Transaction Permission Zones was not discussed. Mayor Oh Sehoon stated last July, "Announcing the Land Transaction Permission Zone is a highly exceptional measure, used only in cases of extreme price surges," drawing a line against the additional designation of Mapo and Seongdong districts. Some interpret that, with the local elections scheduled for June next year and Mayor Oh seeking re-election, he would be reluctant to bear the burden of additional designations.

Furthermore, the September 7 policy included a plan to grant the Minister of Land the authority to designate Land Transaction Permission Zones, leading to speculation that the ministry may pursue additional designations. However, since granting this authority requires a legal amendment, it is expected to be difficult to implement immediately. A Seoul city official said, "If the market situation reaches a 'heated' level like before the loan regulations, discussions about designation may arise. However, there have not yet been any active calls for additional designations, and discussions may take place after the legal amendment."

Ham Youngjin, head of the Real Estate Research Lab at Woori Bank, explained, "The extended re-designation period appears to be intended to prevent speculative demand in the related market, considering the expected decrease in new housing supply in Seoul next year, compared to the previous six-month periods. In addition, since areas along the Han River, such as Seongdong and Mapo, have not yet been designated as adjustment zones, it would have been burdensome to designate them as Land Transaction Permission Zones at this time."

Meanwhile, in this review, eight sites (totaling 446,779.3 square meters) selected as candidates for expedited integrated planning housing redevelopment were newly designated as Land Transaction Permission Zones. The designation period is from September 30, 2025, to August 30, 2026. This measure aims to block speculative demand and improve the efficiency of managing the permission zones. Within the Land Transaction Permission Zones, transactions involving land above a certain size require permission from the head of the relevant district office.