The Seoul Metropolitan Government has decided not to lift the land transaction permission zones for major reconstruction complexes such as Gangnam and Mokdong. However, the city officially stated that it has "not yet reviewed whether to lift the designation," remaining cautious in its remarks.
On the 9th, Seoul City clarified in a statement, "At this point, we have not reviewed whether to lift the land transaction permission zones for areas such as Gangnam and Mokdong," adding, "We plan to review the adjustment at the time of the designation expiration."
This was an official response to a previous statement by a senior city official who said, "It has been decided not to lift the land transaction permission zones for major reconstruction complexes," clarifying that this was not accurate.
The land transaction permission zone refers to areas where transactions of housing, commercial buildings, or land above a certain scale require approval from the district office chief, and purchases are not allowed unless for direct residence or operation purposes. Once designated, so-called 'gap investments,' where properties are bought with leases or jeonse deposits, become impossible.
As of August 31 last year, 55.99㎢, equivalent to 9.2% of the city's total area, was designated as land transaction permission zones.
Among these, major reconstruction complexes in Mokdong, Yangcheon-gu; Yeouido-dong, Yeongdeungpo-gu; Seongsu-dong, Seongdong-gu; and Apgujeong-dong, Gangnam (4.57㎢) will have their designation period expire on April 26 this year. Subsequently, on June 22, the designation period will end for the International Exchange Complex District and nearby areas including Samseong, Cheongdam, Daechi, and Jamsil (14.4㎢).
Public redevelopment candidate sites and planned reconstruction/redevelopment areas under the Rapid Integrated Planning (Shintong Planning) (2.64㎢) will expire on August 30, and natural greenbelt areas in Gangnam and Seocho (Gaepo, Segok, Suseo, Yulhyeon, Jagok, Irwon, Daechi, Naegok, Sinwon, Yeomgok, Wonji, Umyeon, Bangbae, Seocho, Yangjae, 27.29㎢) will have their designation periods end sequentially on May 30, 2024.
The major reconstruction complexes attracted the most attention from the market. As the real estate market faces a transaction freeze and a risk of a hard landing, there were expectations that Seoul City might lift the land transaction permission zone designations in line with the government's regulatory easing.
However, the city appears to view the land transaction permission zones as a minimal safeguard to block speculative demand and protect actual residents, deciding not to lift them. If the current market conditions persist, it is expected to be difficult to lift the zone designations for areas such as Samseong and Daechi, whose designation periods end in June and August.
Mayor Oh Se-hoon said at the January New Year's press briefing, "The recent downward trend in real estate prices needs to go further," adding, "Even if we concede 100 times at the beginning of the Moon Jae-in administration, prices should return to the level reflecting inflation at that time."
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