[Report] 'Just One Day After the Election'... Yeouido and Apgujeong Reconstruction Complexes See Asking Prices Jump by 200 to 300 Million Won

Apartment Prices Stir in Yeouido and Apgujeong Areas After Oh's Election
Expectations Rise for Han River Height Restriction Lift
Withdrawal of Sales Leads to Shortage of Listings
Regulatory Easing May Backfire Amid Price Surge

[Asia Economy Reporter Ryu Tae-min] “As soon as Oh Se-hoon was elected mayor of Seoul, the asking prices for reconstruction complexes in the area jumped by 200 to 300 million KRW each. There is great expectation that the district unit plans, which have long hindered reconstruction projects, will soon be resolved.” (A representative from Yeouido A Real Estate Agency in Yeongdeungpo-gu, Seoul)

The election of Seoul Mayor Oh Se-hoon, who pledged a full deregulation, has raised expectations among major reconstruction complexes in Seoul. It is anticipated that the approval procedures for project implementation in areas where the Seoul city government had previously withheld permits due to concerns over rising housing prices will proceed quickly. In Yeouido and Apgujeong areas, homeowners are withdrawing listings amid expectations that housing prices will rise further following Mayor Oh’s election, causing a shortage of available properties.

On the 8th, the reporter visited major reconstruction complexes in Yeouido, where officials said, “Reconstruction complexes in this area have repeatedly had their maintenance plans rejected because district unit plans have not been finalized,” and expressed hopes that “since reconstruction deregulation was promised, this issue will be prioritized and resolved.” In particular, a representative from the Yeouido Shibeom Apartment Residents’ Countermeasure Committee said, “The Shibeom Apartments, which are now 50 years old, are exposed to safety risks due to aging,” and added, “We hope the district unit plan will be finalized within the second half of the year at the latest.”

In the case of Yeouido Shibeom Apartments, the maintenance plan was rejected in June 2018 due to inconsistency with the district unit plan. In April 2019, apartments such as Gojak and Sujeong, which were not included in the district unit plan, were also asked by the Seoul city government to supplement the maintenance plan with consistency to the comprehensive restructuring master plan.

Similarly, the Apgujeong area, which is also held back by the Seoul city district unit plan finalization, is welcoming the change. Lee Hyun-soo, head of the Apgujeong 5 District Reconstruction Association, said, “Even those who usually do not pay attention to elections actively participated this time, showing great expectations among residents for deregulation,” and added, “We hope the new mayor will fulfill the long-standing wishes of the residents as promised.”

Expectations for Lifting Han River Riverside Height Restrictions... Asking Prices Jump 200 to 300 Million KRW in Just One Day After Election

In addition, expectations for the removal of the ‘35-floor limit on Han River riverside apartments’ regulation, established during former Mayor Park Won-soon’s administration, have grown, causing reconstruction apartment prices in Yeouido and Apgujeong to surge further. For example, a 79.24㎡ (exclusive area) unit in Yeouido Shibeom Apartments was traded for 1.82 billion KRW last month, rising by more than 200 million KRW in three months. The current asking price for the same size is between 1.85 billion and 1.9 billion KRW. A representative from Yeouido A Real Estate Agency said, “As the election approached, homeowners withdrew their listings, causing a shortage,” and added, “If reconstruction projects become concrete, housing prices are expected to rise further.”

The Hyundai 7th Apartment, considered the ‘reconstruction leader’ in Apgujeong, recorded an all-time high price of 8 billion KRW for a 245㎡ unit on the 5th. This is analyzed as reflecting expectations for reconstruction revitalization. The highest asking price for a 131㎡ unit in Hyundai 1st and 2nd Apartments in Apgujeong also reached 4 billion KRW as of that day, which is 350 million KRW higher than last month’s sale price of 3.65 billion KRW. A representative from nearby B Real Estate said, “The price had been rising for two to three months as the association establishment approval was granted and reconstruction expectations grew,” and added, “With Mayor Oh’s election, there is a high possibility of transactions at even higher prices.”

Ye Kyung-hee, senior researcher at Real Estate 114, explained, “The rising expectations for reconstruction are reflected in prices,” and added, “If reconstruction projects steadily progress as the market expects, the price increase trend is likely to continue.”

However, there are concerns that this price surge might actually hinder Mayor Oh’s deregulation policy. If housing prices, which had just begun to stabilize, start to fluctuate again, there could be a backlash from public opinion. An industry insider said, “If deregulation of reconstruction is pushed during a housing price rise, it could face criticism for encouraging speculation,” and warned, “In that case, it will be inevitable to adjust the pace of policy implementation.”