Scheduled for Steering Committee Approval in February... Goal to Establish Association Within One Year
Integrated Promotion as a Large Complex of 3,311 Households... Housing Prices Soaring
[Asia Economy Reporter Donghyun Choi] The largest aged Jugong apartment complexes in Gwacheon-si, Gyeonggi Province, complexes 8 and 9, are set to begin full-scale reconstruction efforts. These two complexes are the last apartments among the 12 complexes that have yet to establish a reconstruction promotion committee.
According to the maintenance industry on the 28th, the Reconstruction Promotion Preparation Committee for Gwacheon Jugong Complexes 8 and 9 has about 50 consent forms left to collect for forming the committee. Since June last year, residents of the complexes have been volunteering to gather consent forms, and by the end of last year, they even hired promotional staff to secure consent from over 1,000 residents. Choi Kyung-joo, chairman of the Reconstruction Promotion Preparation Committee for Jugong Complexes 8 and 9, said, "At this rate, approval of the promotion committee in February seems feasible," adding, "Our goal is to obtain approval for the establishment of the association within a year."
Jugong Complexes 8 and 9 are known as the last reconstruction apartments in Gwacheon city. They consist of a total of 2,120 households, with 1,400 households in Complex 8 and 720 households in Complex 9, located at the northernmost part of the aged apartment area in Gwacheon. Complex 8 consists of mid-rise apartments of 14 to 15 floors, while Complex 9 consists of low-rise apartments of 5 floors, and they are pursuing integrated reconstruction. The promotion committee plans to rebuild the existing apartments into high-rise apartments totaling 3,311 households.
Among the apartments in Gwacheon city, three complexes have completed reconstruction. Complex 11, known as "Raemian Eco Palace," and Complex 3, "Raemian Sure," were the first to complete their projects in 2007-2008, and in 2018, Complex 7-2 (Raemian Gwacheon Central Suite) completed move-ins. Complexes 2 (Gwacheon Weverfield), 6 (Gwacheon Prestige Xi), 7-1 (Gwacheon Central Park Prugio Summit), and 12 (Gwacheon Centreville) are currently in the sales and move-in stages. Complexes 4, 5, and 10 are in the promotion committee or association establishment stages, with only Complexes 8 and 9 yet to establish a promotion committee.
Although the project has just begun, housing prices continue to soar. Expectations for reconstruction, along with major favorable factors such as the development of the nearby Gwacheon Knowledge Information Town and the metropolitan area express railway (GTX) Line C, have driven up housing prices. The 73㎡ unit in Complex 8 was sold for 970 million KRW in February last year but surged to 1.35 billion KRW by December of the same year. The 47㎡ unit in Complex 9 also rose from 810 million KRW to 1.02 billion KRW during the same period, an increase of over 200 million KRW. According to the Korea Real Estate Agency, apartment prices in Gwacheon rose 10.1% last year, recording the highest increase rate in the metropolitan area. A representative from A Real Estate in Burim-dong said, "Last year, mainly real demand buyers in their 20s and 30s, such as newlyweds, were looking to buy or rent apartments," adding, "However, since the announcement of the December 16 real estate measures, the market has been in a lull."
Complexes 8 and 9 are subject to both the reconstruction excess profit recoupment system and the pre-sale price ceiling system, but residents believe this year is the right time to push the project forward. They calculate that if this year's official property price is applied in the excess profit calculation process, the burden may decrease. The reconstruction excess profit burden is calculated by subtracting the official property price at the time of the promotion committee's establishment, development costs, and normal housing price increases (surrounding market price increases) from the new apartment price at completion (association member sale price + general sale price + small rental housing price). If the promotion committee is established before April, when the official property price for apartment complexes is determined this year, the burden will be lower. Chairman Choi said, "Regarding the price ceiling system, a recent simulation conducted by an appraiser showed that residents would only need to pay about 30 million KRW per household, so residents are not overly worried."
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