After a 5.5 Billion Won Surge in a Year, Even Hannam The Hill Faces Regulation... Government Expands LTPZ Scope [Real Estate A to Z]

Multi-Family Housing Within Apartment Complexes Now Regulated
11 Buildings at Hannam The Hill Included in LTPZ
Luxury Villas in UN Village Benefit from Exemption

The luxury residential complex "Hannam The Hill" in Yongsan-gu, Seoul, will also be designated as a Land Transaction Permission Zone (LTPZ) starting from October 20. This ultra-high-end residence set a new record price of 17.5 billion won in March, but parts of the complex had been excluded from the LTPZ designation because they were classified as multi-family housing.

According to the housing market stabilization measures announced by the government on October 15, all 25 districts of Seoul will be designated as LTPZs. In particular, the government has expanded the scope of regulated complexes. Multi-family or townhouse residences in Seoul that include at least one apartment building within the same complex will now be included in the LTPZ designation.

Hannam The Hill, Yongsan-gu, Seoul. Yonhap News Agency

Sixteen complexes that had previously avoided regulation because they were classified as multi-family or townhouse housing within a single apartment complex will now be newly designated as LTPZs. An official from the Ministry of Land, Infrastructure and Transport stated, "We conducted a comprehensive survey of building uses through the Korea Real Estate Board," adding, "The decision was made to address the issue of certain complexes, such as Hannam The Hill, which had avoided regulation because they included multi-family housing."

At Hannam The Hill, 11 out of 32 buildings are four stories or less and thus classified as multi-family housing. For this reason, although Yongsan-gu was designated as an LTPZ in March, these 11 buildings at Hannam The Hill were not included in the regulated area, raising concerns about fairness. Hannam The Hill set a record price in March when a 242.20-square-meter unit was sold for 17.5 billion won, an increase of about 5.5 billion won in just one year. Buyers of Hannam The Hill must now obtain approval from the head of the local government under the new regulations. They are also required to reside in the property for at least two years.

In contrast, luxury multi-family housing complexes that do not include any apartment buildings are excluded from regulation. A representative example is the high-end multi-family residences located within UN Village in Hannam-dong. UN Village is an area densely populated with luxury villas, and although it includes apartment complexes such as Hilltop Treasure, these are not grouped on a single land parcel and are thus excluded from regulation.

UN Village in Hannam-dong. Photo by Yonhap News

Among the luxury villas in the area is "Sangwoldae," designed by IROJE Architects & Planners, headed by renowned architect Seung Hyo-Sang. Sangwoldae is classified as multi-family housing in the building register, and in 2021, a 147.85-square-meter unit was sold for 2.57 billion won. Yurim Villa, located at the entrance of UN Village, is also classified as multi-family housing and is therefore excluded from regulation. In 2023, a 189.6-square-meter unit at Yurim Villa changed hands for 4.4 billion won. Currently, units of the same size are listed for sale at prices ranging from 6.5 billion to 6.7 billion won.

Experts predict that transactions of luxury residences designated as LTPZs will temporarily slow down. Kim Hyosun, Senior Specialist at NH Nonghyup Bank, said, "The high-end market has a lot of demand for actual occupancy and is not heavily dependent on loans, so people who want to buy will still do so even if the area is designated as an LTPZ." However, she added, "With the start of stricter regulations, some buyers may take a wait-and-see approach, anticipating possible price declines. Transactions are expected to decrease for the time being."