Mokdong 'Buzzes'... Trading Volume Doubles Following Consecutive Safety Inspections Passed

Final Confirmation of 5 Conditional Reconstruction Complexes
Rapid Momentum Boosts Transactions Mainly in Quick-Sale Properties

Among the new town apartments in Mokdong, Yangcheon-gu, Seoul, the reconstruction of all five complexes that received a 'conditional reconstruction' judgment in January has been confirmed. Thanks to the government's deregulation efforts to revive the real estate market, reconstruction in Mokdong is gaining momentum, and the atmosphere of buying and selling has rapidly increased since the beginning of this year.

According to the maintenance industry on the 5th, Yangcheon-gu announced on the 28th of last month that the reconstruction safety inspection for Mokdong New Town complexes 1, 2, 4, 8, and 13 had passed. All five complexes had received a conditional reconstruction judgment in the safety inspection conducted in January. A Yangcheon-gu official explained, "At the public housing safety inspection advisory committee meeting, after reviewing the safety inspection result reports according to the Ministry of Land, Infrastructure and Transport's review standards, it was determined that appropriateness review by public institutions was unnecessary for all five complexes, and reconstruction was confirmed."

Accordingly, among the Mokdong New Town apartments complexes 1 to 14, all complexes except for 9 and 11, which failed the safety inspection, passed the safety inspection and confirmed their reconstruction projects. Currently, complex 6, selected as a rapid integrated planning target site, is the fastest, and in January, complexes 3, 5, 7, 10, 12, and 14 passed the safety inspection.

Mokdong New Town Apartments, Yangcheon-gu, Seoul [Image source=Yonhap News]

Built in the 1980s, the Mokdong New Town apartments have long exceeded the eligible reconstruction period (30 years after completion), but due to the Moon Jae-in administration's strengthened regulations, most of them failed to pass even the first gate of reconstruction, the safety inspection, until last year. However, under the current administration, regulations have been eased, including the announcement of rationalization measures for safety inspections, completely changing the atmosphere.

Although still in the early stages, reconstruction is gaining momentum, and with the government recently lifting Yangcheon-gu from the regulated area, transaction volumes have noticeably increased. This is because loan and tax-related regulations have been relatively relaxed, lowering entry barriers. According to the Seoul Real Estate Information Plaza, Yangcheon-gu's transaction volume was ▲16 cases in October last year ▲19 cases in November ▲28 cases in December, but ▲56 cases in January this year ▲67 cases in February, showing a significant increase. This is the highest volume since 79 cases in April last year.

Apartment sales transactions in Yangcheon-gu are mainly conducted with urgent sale properties priced below market value. However, as inquiries increase, cases of sales at prices higher than previous transactions are also emerging one after another.

A 66.6㎡ (exclusive area) unit in Mokdong New Town complex 7 changed hands for 1.675 billion KRW on the 16th of last month. This is more than 265 million KRW higher than 1.4098 billion KRW on the 8th of last month. Although it is lower than the highest price of 1.925 billion KRW set in September last year, it clearly reflects the changed atmosphere.

A 67.5㎡ unit in Mokdong New Town complex 4 was also traded for 1.32 billion KRW on the 6th of last month, which was 120 million KRW higher than the previous sale price of 1.2 billion KRW on the 3rd of last month. All transactions were brokered, not direct deals.

An official from a real estate agency in Mokdong explained, "Originally, transactions were centered on cheap properties put up in a hurry, but since Mokdong has waited a long time for reconstruction, there are not many such urgent sale properties. As reconstruction projects gradually proceed, demand arises, and some complexes are showing a slight price recovery."

In fact, statistics also show that the decline in house prices in the Yangcheon-gu area has narrowed compared to the end of last year. According to the weekly apartment price trend by the Korea Real Estate Board, the apartment price change rate in Yangcheon-gu decreased from -0.47% as of December 12 last year to -0.27% as of February 27 this year.