[Report] Redevelopment Stalled for 8 Years Restarts... Hongjedong Stirring Up

Visiting the 5th Urban Public Complex Development Candidate Site... 'Pre-consent Rate 35%'
Repeated Development Failures Since 2013... Many Old Buildings and Insufficient Parking Facilities
Demand Rises to Catch the 'Last Priority Supply Right'

Low-rise residential area around Hongje-dong, Seoul, selected as a government urban public housing complex district. As the development, which has been stalled for eight years, is likely to be resumed, the buying trend by outsiders is also increasing. (Photo by Ryu Taemin)

[Asia Economy Reporter Ryu Tae-min] "As soon as the announcement was made, the inquiry calls have been nonstop. Since there was a strong desire for development, the atmosphere is welcoming the selection of the candidate site." (Representative of A Real Estate Agency (Certified) in Hongje-dong, Seoul)

On the 23rd, real estate agencies in the low-rise residential area on the west side of Goeunsan, Hongje-dong, Seodaemun-gu, the only area included in the 5th candidate sites for the Urban Public Housing Complex Development Project (Public Complex Development) announced by the government, were busy answering the flood of calls throughout the afternoon. Compared to other districts, the area has a relatively low proportion of commercial buildings and is densely populated with old row houses, multi-family houses, and detached houses, so residents welcomed the selection as a candidate site. The government plans to redevelop the 114,770㎡ low-rise residential area located on the western foothills of Goeunsan into 2,975 apartment units through high-density development.

Expectation to Resolve a Long-Standing Project Stalled for 8 Years

At A Real Estate Agency in Hongje-dong visited that afternoon, residents gathered to share their joy about the announcement. Resident Kim said, "Every time the public complex development candidate sites are announced, I have been waiting for this area to be selected," expressing hope that "the redevelopment, which has been repeatedly canceled for 8 years, will succeed this time."

This area was already designated as a maintenance planned zone in April 2013. However, it was later removed from the zone, and development has been stalled for over 8 years. Resident B said, "The buildings are old, and there is a lack of parking spaces, causing many inconveniences in daily life," adding, "I really hope redevelopment will be carried out." A representative from A Real Estate Agency said, "Even after the cancellation of the maintenance planned zone designation, residents have shown high interest by repeatedly pushing for redevelopment," and predicted, "Since the resident consent rate for redevelopment has already exceeded 35%, the project is expected to gain momentum."

"Let's Catch the Last Train for Priority Supply Rights" Investment Demand Floods In

As the cash settlement standard date for housing in the Urban Public Housing Complex Project was effectively postponed from February 5 to the end of this month, buying demand has surged in this area. This is because if one purchases a house and completes the transfer registration within about ten days before the related bills pass the National Assembly, they can receive priority supply rights for apartments.

In fact, real estate agencies in this area were full of residents inquiring about housing sales. A representative from B Real Estate said, "Since there is little time left to receive priority supply rights, everyone is rushing to buy," and added, "We received about 30 inquiries about listings just today."

According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system, there were 4 housing transactions concluded in this area on the day of the candidate site announcement, the 23rd. Considering contracts that have not yet been reported, the number of transactions is expected to be higher.