Direct Benefits to Dunchon Jugong and Banpo One Bailey from Relaxed High Price Standards and Support for Redevelopment Project TF
[Asia Economy Reporter Choi Dong-hyun] While follow-up measures to the government's December 16 real estate policy continue to be implemented, public projects and institutional improvements that benefit the Gangnam area are also being introduced one after another. Some critics argue that this may be an attempt to appeal to Gangnam voters ahead of the general elections in April.
According to industry sources on the 17th, the Housing and Urban Guarantee Corporation (HUG) recently revised its high-priced sale price review criteria. Currently, HUG calculates sale prices by finding comparable complexes within a 2 km straight-line distance in the same administrative district, prioritizing ▲within 1 year of sale ▲between 1 year after sale and before completion ▲within 10 years after completion. When selecting comparable complexes, factors such as brand, scale, and location conditions are considered, and this criterion has been subdivided to reflect the characteristics of individual projects.
This revision of HUG's review criteria is expected to increase the profitability of reconstruction projects in the Gangnam 4 districts?Gangnam, Seocho, Songpa, and Gangdong?that are trying to avoid the private land sale price ceiling system. Complexes such as Dunchon Jugong in Dunchon-dong, Gangdong-gu, Raemian One Bailey in Banpo-dong, Seocho-gu, and Gaepo Jugong 1 Complex in Gaepo-dong, Gangnam-gu are cited as direct beneficiaries. The Dunchon Jugong union, which set the general sale price at an average of 35.5 million KRW per 3.3㎡ at the general meeting for the change of management disposition plan approval last December, plans to negotiate sale prices with HUG within a ±10% range in March. One Bailey is also hopeful of raising its general sale price. The union member sale price for this complex is 54 million KRW per 3.3㎡, but based on the sale price of 'Le El Shin Banpo Central,' which was sold nearby in November last year, the general sale price would be around 48.91 million KRW per 3.3㎡. Under the existing regulations, the general sale price would actually be lower than the union member sale price. The union believes that applying HUG's new criteria will likely push the sale price above 50 million KRW.
Benefits from the task force (TF) supporting redevelopment projects led by the Seoul Metropolitan Government are also concentrated in the Gangnam area. The TF's first site visits were to One Bailey in Banpo-dong, Seocho-gu, and Sinbanpo 13th and 14th complexes in Jamwon-dong. Thanks to TF support, the period for approval of project implementation changes and structural safety reviews for One Bailey has been significantly shortened, increasing the likelihood of avoiding the sale price ceiling system. The Gaepo Jugong 1 Complex in Gangnam-gu also reached an agreement with the commercial committee through Seoul City's mediation.
The Korea Land and Housing Corporation (LH) also recently announced a plan to expedite the sale conversion of 1,488 units of 10-year public rental apartments and urban lifestyle housing in the three Gangnam districts (Seocho, Gangnam, and Songpa) ahead of the general elections. The 10-year public rental apartments are housing units where tenants can live for 10 years under rental agreements before converting to ownership. LH had previously not responded to residents' demands for early sale conversion. An academic source commented on this plan, saying, "It could be misunderstood as a typical populist policy aimed at attracting votes in the Gangnam area, where the ruling party's position is relatively weak."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
