"Thank You, Regulations"... After Apgujeong 5, Gwacheon Jugong 8 and 9 Also Establish Associations

Gwacheon Jugong 8·9 Complex Notified of Union Establishment Approval on 23rd
Apgujeong 5 District Also Approved on 22nd, a Day Earlier
'2-Year Actual Residence Regulation' Acts as Catalyst for Reconstruction
House Prices Surge Sharply... "Record Highs Will Continue"

An apartment complex in Apgujeong-dong, Gangnam-gu, Seoul [Image source=Yonhap News]

[Asia Economy Reporter Onyu Lim] Following Apgujeong-dong 5 District (Hanyang 1st and 2nd phases) in Gangnam-gu, Seoul, the reconstruction association establishment approval was granted to Jugong 8 and 9 Complexes in Burim-dong, Gwacheon, Gyeonggi Province. To avoid the '2-year residence obligation,' prime reconstruction projects in the metropolitan area are accelerating.

According to the maintenance industry on the 24th, the Gwacheon Jugong 8 and 9 Complexes received approval for the establishment of a reconstruction maintenance project association from Gwacheon City yesterday afternoon. It has only been nine months since the promotion committee was approved in May last year. This complex, with a total of 2,120 households (1,400 households in Complex 8 and 720 households in Complex 9), is scheduled to be reconstructed into a maximum of 35 floors and 3,311 households through project implementation approval and management disposition plans.

The reason Gwacheon Jugong 8 and 9 Complexes succeeded in establishing the association in a short period is due to the strengthened residence requirements following the June 17, 2020 measures. The government stipulated that reconstruction association members in speculative overheated districts can only qualify for new apartment allocations if they have resided for two years. However, projects that completed the association establishment application before the amendment of the Urban and Residential Environment Maintenance Act can avoid this regulation, prompting a speed race among reconstruction projects. The bill is still pending in the National Assembly. A representative of the Gwacheon Jugong 8 and 9 Complex association said, "After the June 17 measures, inquiries regarding the 2-year residence requirement surged," adding, "Subsequently, consent forms from owners of Complex 9, who had relatively low agreement rates, were submitted, enabling the establishment of the association."

The sluggish reconstruction in Apgujeong is also being catalyzed by the 2-year residence regulation. On the 22nd, Apgujeong 5 District received reconstruction association establishment approval from Gangnam-gu Office, three years and six months after the promotion committee approval in August 2017. This is the second association establishment following District 4 (Hyundai 8th phase, Hanyang 3rd, 4th, and 6th phases) among the six maintenance districts in Apgujeong. Additionally, the largest District 3 (Hyundai 1st to 7th, 10th, 13th, 14th phases, Daerim Villate) with a total of 4,065 households and District 2 (Hyundai 9th, 11th, 12th phases) are preparing for association establishment. They plan to hold association establishment general meetings on the 28th and 25th, respectively.

As reconstruction projects accelerate, housing prices are also rising sharply. A 182㎡ (exclusive area) unit in Shinhyundai 12th phase, Apgujeong-dong, changed hands last month at a record price of 5.75 billion KRW. This is 1.4 billion KRW higher than the actual transaction price of 4.35 billion KRW a month earlier. The 156㎡ units in Hyundai 6th and 7th phases were traded at 4.1 billion KRW last month, but asking prices soared to 5 billion KRW. The actual transaction price of a 73㎡ unit in Gwacheon Jugong 8 Complex also rose from a peak of 1.32 billion KRW in January last year to 1.48 billion KRW in January this year. The asking price for available units exceeded the loan restriction line, rising to 1.55 billion KRW.

A representative from a real estate agency in Apgujeong-dong said, "Prices have jumped by hundreds of millions of KRW within a month to the point where sellers can name their price," adding, "Once the association is established, only properties owned for more than 10 years and where the owner has resided for more than 5 years can be traded, so record-high prices are expected to continue."