Gangnam-gu Proposes Lifting Land Transaction Permission Zones in Daechi, Samsung, and Cheongdam-dong

Real estate transaction volume plummets to 35% level, transaction prices drop by over 600 million KRW... 70% of residents oppose re-designation

Gangnam-gu (District Mayor Jo Seong-myeong) announced that, as the designation period for the land transaction permission zone covering 9.2㎢ in Daechi, Samsung, and Cheongdam-dong is approaching expiration, it will submit an opinion to Seoul City on June 15 to lift the land transaction permission zone designation.

This area was designated as a land transaction permission zone on June 23, 2020, to curb speculative demand in the international exchange complex district and surrounding areas. The designation was extended twice and is scheduled to expire on June 22 of this year.

The district analyzed apartment transaction data from the actual transaction price disclosure system over the past four years for the designated zone and conducted monitoring of real estate brokerage offices in 25 major apartment complexes.

As a result, it was analyzed that real estate transaction volume sharply declined to about 35% since the zone was designated in June 2020. Regarding transaction prices, although prices steadily rose after the designation, they dropped by more than 600 million KRW compared to the peak price after the second quarter of 2022 due to interest rate hikes, and have maintained a clear stable trend for over a year, indicating that the designation’s effect on stabilizing real estate prices is minimal.

A survey conducted in March among 700 residents of Gangnam-gu and adjacent autonomous districts showed that 54% of all respondents and 78% of residents in Daechi, Samsung, and Cheongdam-dong opposed the re-designation of the permission zone.

The main reasons for opposition were ‘infringement on private property rights’ at 39.8%, followed by ‘restriction on free real estate transactions’ at 23.8%.

Additionally, according to the Ministry of Land, Infrastructure and Transport’s ‘Guidelines for Designation and Lifting of Land Transaction Permission Zones,’ both quantitative indicators (land price change rate over the past three months, cumulative transaction volume analysis) and qualitative indicators (practical benefits of designation) correspond to ‘stability,’ thus meeting the conditions for lifting the permission zone, the district explained.

In March, the district submitted an opinion to Seoul City to lift the land transaction permission zone for the Apgujeong apartment district covering 1,149,476㎡, but the city extended the expiration by one year due to concerns over rising housing prices from reconstruction.

Jo Seong-myeong, Mayor of Gangnam-gu, stated, “With the sharp decline in real estate transaction volume and prices in Daechi, Samsung, and Cheongdam-dong, there is no reason to maintain the land transaction permission zone, and it is judged that the regulation excessively restricts residents’ private property rights, so we have submitted an opinion to lift the designation. We will continue to actively strive to ease or abolish regulations that lack policy effectiveness and impose excessive burdens on residents.”