[Report] Management Disposition Approval After 23 Years... Noryangjin District 1 Premiums Surge

Management Disposition Approval Granted for District 1

Resident Relocation Expected to Begin in July

Pre-Approval Premiums Reach 1.5 Billion Won

Additional Premiums of Several Hundred Million Won Anticipated

"After the management disposition approval, properties coming onto the market will see their premiums increase by several hundred million won," (Real estate agency near Noryangjin District 1)

On the 21st, I visited Noryangjin New Town in Dongjak-gu, Seoul. After walking for about 10 minutes from Noryangjin Station on Subway Line 9, I saw aging homes appearing between the tents that surround Noryangjin District 5 ahead of demolition. On either side of a narrow alley stood the now-vacant buildings in District 5, where relocation is complete, and the single-family homes in District 1, where residents are still living.

Despite the desolate atmosphere, the residents were all in high spirits. This was because news had spread that Noryangjin District 1 had obtained management disposition approval. Resident A (age 65) said, "Since District 6, the first to be offered for sale in the New Town, was completely sold out, the expectations for the redevelopment of District 1 among union members are extremely high."

Residential area around Noryangjin 1 District, Dongjak-gu, Seoul, on the 21st. Photo by Lee Jieun

With Noryangjin District 1 having passed the critical stage of redevelopment, anticipation is growing throughout the Noryangjin area. Districts 6 and 8 have started sales sequentially, while the remaining districts have begun demolition and relocation, making the large-scale redevelopment of about 9,000 households increasingly tangible.

According to the maintenance industry as of April 22, Dongjak-gu Office granted management disposition approval to Noryangjin District 1 the previous day. This comes 23 years after it was designated a redevelopment promotion district in 2003.

The project for Noryangjin District 1 involves constructing 3,103 residential units on a 132,132 square meter site in the Noryangjin area of Dongjak-gu. With 962 union members, this is a large-scale project, and 527 members have applied for the 1+1 allocation, the highest number among redevelopment projects in Seoul. The total construction cost amounts to 1.0927 trillion won, with a construction cost per pyeong (3.3 square meters) of 7.3 million won.

Once completed, the area is expected to be reborn as a large apartment complex with buildings up to 49 stories high. The builder is POSCO E&C, and the complex will be named 'Otier Dongjak' applying the high-end 'Otier' brand. The union plans to begin resident relocation in July, aiming to complete the process within six months to a year at the earliest.

Noryangjin District 1 is the largest among the eight districts in Noryangjin New Town and is considered the flagship area due to its proximity to Noryangjin Station on Subway Lines 1 and 9. In particular, as it was the last of the eight districts to receive management disposition approval, the ability to transfer union membership has attracted significant investment demand. Kim Jaekyung, Director of Tumi Real Estate Consulting, explained, "Even within Noryangjin New Town, District 1 is considered the central axis due to its excellent location."

On the 21st, residential areas near Noryangjin District 1 and District 5 in Dongjak-gu, Seoul. The buildings within Noryangjin District 5, where relocation has been completed, are surrounded by tents. Photo by Lee Ji-eun

With strong buyer demand, properties eligible for an 84-square-meter exclusive area residency right have recently traded for around 2.5 billion won, including a premium of about 1.5 billion won. According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system, on April 17, a multi-family villa with an exclusive area of 72.59 square meters (21 pyeong) and a land share of 49 square meters (14.8 pyeong) changed hands for 2.2 billion won. For the 1+1 properties, which grant rights to both 84-square-meter and 59-square-meter units, the rights are valued at 1.7 billion won, with a premium of another 1.7 billion won, bringing asking prices to 3.4 billion won.

Despite the high asking prices, local real estate agencies agreed that most properties were snapped up just before management disposition approval. The director of Real Estate Agency A in Noryangjin District 1 said, "Many elderly owners put up urgent sales as approval approached," adding, "Professional workers in their 30s and 40s who had at least 2 billion won in cash quickly bought up these properties."

However, there is still a possibility that additional properties with higher premiums will come onto the market even after the management disposition approval. This is because single-home owners who meet the five-year residency and ten-year ownership requirements can still transfer their union membership even after approval. The director of Real Estate Agency B in District 1 said, "There is no reason for owners who meet these requirements to sell before the approval," adding, "After approval, such properties are expected to appear in small numbers on the market, with additional premiums of at least 100 to 200 million won."

Meanwhile, in Noryangjin New Town, District 6 'La Clache Zeide Pine' has started sales, and District 8 'Acro River Sky' is expected to go on sale next month, followed by District 2 'Define Artia' in June. District 4 is in the process of demolition and is set to break ground later this year. District 7 is currently undergoing relocation, District 5 has completed relocation and is preparing for demolition, and District 3 received management disposition approval in February.

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