Urban Complex Project Kicks Off... 2023 Pre-Subscription

Designation of Four Station Area Planned Districts Including Jeungsan, Yeonsinnae, Ssangmun, and Banghak Stations
Private Development Sale Prices at 70% Level

[Asia Economy Reporter Kangwook Cho] Four areas around subway stations in Seoul, including Jeungsan, Yeonsinnae, Ssangmun, and Banghak stations, have been designated as planned districts for the ‘Urban Public Housing Complex Project (Urban Complex Project)’ and will undergo high-density development. The government plans to designate these areas as official districts within the year and conduct preliminary subscription as early as 2023.

On the 27th, the Ministry of Land, Infrastructure and Transport announced that, according to the ‘3080+ Metropolitan Area Housing Supply Plan,’ four locations?Jeungsan 4 District, Yeonsinnae Station, the east side of Ssangmun Station, and the area around Banghak Station?will be designated as planned districts for the Urban Complex Project. The Urban Complex Project is led by public institutions such as the Korea Land and Housing Corporation (LH) to supply new housing by high-density development of aging urban areas including station areas, low-rise residential zones, and semi-industrial areas. These planned districts were previously selected as pilot candidate sites in March.

The Ministry explained that the current resident consent rates are 75% for Jeungsan 4 District, 67% for Yeonsinnae Station, 81% for the east side of Ssangmun Station, and 75% for Banghak Station. The designation dates for the planned districts are the 28th for Jeungsan 4 District and the 29th for the other three locations. After designation, these areas will undergo a 14-day period for collecting residents’ opinions and review by the Central Urban Planning Committee before proceeding with official district designation.

The Ministry aims to complete the official district designation for these four areas within the year. Considering the pace of project implementation, the Ministry expects that general supply through preliminary subscription will be possible by the second half of 2023. While existing redevelopment projects typically take about 13 years from district designation to sale, the Urban Complex Project is expected to shorten this period by more than 10 years, requiring less than two years from district designation to preliminary subscription, according to the Ministry.

On the same day, the Ministry also disclosed the estimated sale prices for the four candidate sites. The priority supply price for original residents receiving in-kind compensation is estimated at 480 million to 490 million KRW for 59㎡ (exclusive area) units and 610 million to 640 million KRW for 84㎡ units. The average burden per household is expected to be between 80 million and 130 million KRW. The Ministry explained that these prices are about 30% lower than those of private redevelopment projects in the respective areas.

The Ministry plans to supply the general supply units as public housing subject to the sale price ceiling system. The general sale price is analyzed to be about 60% of the nearby market price, averaging 19.31 million to 22.57 million KRW per 3.3㎡, according to the Ministry.

Previously, the government selected a total of 56 candidate sites nationwide. The planned construction volume is 76,000 households. Including nine additional sites discovered by the ruling party and government task force (TF) last month, the total number of sites increases to 65 (86,000 households). Among these, 19 sites with more than two-thirds resident consent, including the four planned districts this time, account for a total of 25,800 households.

Meanwhile, the Ministry confirmed a total of 10 suspected illegal transactions, including disguised gifts and misuse of loans, during real estate transaction investigations in the four areas including Jeungsan 4 District, and plans to notify the National Tax Service, Financial Services Commission, and relevant local governments.