[Asia Economy Reporter Kim Hyemin] As newly appointed Seoul Mayor Oh Se-hoon begins receiving departmental work reports from the 12th, the focus is expected to start with real estate policy.
According to Seoul City officials on the 11th, Mayor Oh will receive work reports from various offices, bureaus, and headquarters this week. On the 12th, reports related to housing and safety are scheduled. A Seoul City official said, "The work reports will begin with the Housing Construction Headquarters, followed by housing-related departments within the Urban Planning Bureau, and then the Public Announcement Price Department of the Finance Bureau."
Originally, the housing sector, including the Housing Construction Headquarters, was scheduled for the 13th, but it was moved up by a day to be the first. This is interpreted as a sign that real estate policy is being viewed with particular sensitivity.
Through these work reports, Mayor Oh is expected to receive detailed updates on ongoing projects and instruct a review of any parts that do not align with his policy direction. Subsequently, organizational restructuring, including the abolition or downsizing of related departments, is anticipated.
During his candidacy, Mayor Oh pledged to establish a housing supply organization directly under the mayor's office and to integrate the regulatory Urban Planning Department with the Housing Supply Department to shorten various approval periods. He also hinted at a full review of the urban regeneration projects initiated by former Mayor Park Won-soon.
However, organizational restructuring requires amending the "Seoul City Administrative Organization Establishment Ordinance," which must pass through the City Council. If the restructuring involves a large-scale removal of organizations created by the previous mayor, there is a high possibility of rejection by the City Council, which is controlled by the ruling party. During a meeting with Mayor Oh on the 8th, the City Council had already expressed caution, stating, "We believe you will lead key projects such as urban regeneration, which Seoul has pursued over the past decade, with continuity."
Therefore, there is speculation that Mayor Oh will likely opt for modification and supplementation rather than aggressively erasing the previous mayor's legacy. On the first day of work, during a greeting with senior staff, Mayor Oh said, "The previous mayor (former Mayor Park) came and overturned the work of his predecessor, which is a vivid memory. Taking that as a lesson, I will not easily change direction, cancel, or disregard ongoing work."
Given his emphasis on easing redevelopment and reconstruction regulations and freezing public announcement prices, attention is focused on how he will organize the real estate policy direction.
After focusing on COVID-19 response since starting his duties, Mayor Oh began his real estate policy moves on the 10th by expressing his intention to push for a re-investigation of public announcement prices for multi-family housing. After inspecting the Seoul Station COVID-19 temporary screening clinic, he told reporters, "Seoul City does not have the authority to adjust the increased public announcement prices, but if we propose it with proper re-investigation and evidence, I hope the central government will not refuse outright." This means he aims to re-examine whether there are errors in the public announcement prices and to achieve a freeze on these prices.
As promised, it is expected that the approval process for reconstruction apartments will also be accelerated. The focus is likely to be on complexes that have passed safety inspections but are delayed in administrative procedures such as reconstruction notifications or reviews. These include Jamsil Jugong Complex 5 in Songpa-gu, Apgujeong-dong in Gangnam-gu, and Yeouido-dong in Yeongdeungpo-gu.
However, if regulations are lifted all at once, there is concern that, contrary to the initial expectation of stabilizing the real estate market, housing prices may surge again. In fact, prices are being stimulated, with asking prices rising sharply, especially in reconstruction complexes.
Therefore, there is also speculation that large apartment complexes with significant symbolic value will be prioritized for deregulation first, followed by a sequential approach to reconstruction. During his candidacy, Mayor Oh said in an interview with a media outlet, "If reconstruction and redevelopment are rushed, there is a risk of stimulating surrounding real estate prices. Rather than doing it simultaneously, it is necessary to cooperate with the City Council to regulate the pace and volume by setting an order sequentially."
There are also arguments that supply should be accelerated even if it means accepting short-term apartment price increases. Since it sends a supply signal, it could prevent 'panic buying,' where buyers rush to purchase homes fearing they will never be able to buy one otherwise.
Yoon Ji-hae, Chief Researcher at Real Estate 114, said, "The side effect is stimulating expectations of rising housing prices, but if this is not partially accepted, there will be limits to smoothly expanding supply." She added, "There is no way to both buffer short-term volatility and increase supply significantly. It is a matter of choice whether to accept short-term price fluctuations to expand supply or to continue gradual development while still facing supply shortage issues."
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