Rising Housing Prices in 'Mokdong' Amid Reconstruction Competition... 9th Complex Reapplies for Safety Inspection

Yangcheon District Office Announces Precision Safety Inspection Service
37 Years Since Completion... Failed Once in 2020
Rising Transaction Volume and Prices Amid Mokdong Reconstruction Boom

The Mokdong New Town 9 Complex, which faced the "bitter taste of failure" in 2020, is making a renewed attempt at the detailed safety inspection for reconstruction. Following the speed competition among the 12 complexes in Mokdong that have already passed the safety inspection earlier this year thanks to regulatory easing, the 9 Complex is now catching up, heating up the reconstruction fever in the area. Additionally, with frequent ownership changes, prices are also showing signs of rebound.

Panoramic view of apartments in Mokdong, Yangcheon-gu, Seoul

According to the maintenance industry on the 21st, Yangcheon District Office announced a bid on the 15th for the detailed safety inspection service for the reconstruction of Mokdong 9 Complex. Mokdong 9 Complex is an apartment complex completed in July 1987, well beyond the 30-year reconstruction eligibility period. It consists of up to 15 floors, 2,030 households, and a floor area ratio of 133%.

This complex has previously failed the reconstruction safety inspection. In March 2020, it received a conditional reconstruction judgment, but the project fell through after maintenance was recommended during the second detailed safety inspection appropriateness review in December. At that time, it failed to meet the strengthened safety inspection criteria.

However, earlier this year, the Ministry of Land, Infrastructure and Transport announced the "Rationalization Plan for Reconstruction Safety Inspections," reigniting the reconstruction prospects. The weight of structural safety in the safety inspection evaluation was reduced from 50% to 30%, while the weight of residential environment increased from 15% to 30%. Furthermore, the appropriateness review procedure for complexes that received conditional reconstruction judgments was effectively eliminated, allowing Mokdong 9 Complex to make a renewed attempt.

Currently, a speed competition toward reconstruction is underway among complexes in Mokdong. Among Mokdong New Town Complexes 1 to 14, all except the 9 and 11 Complexes have passed the first hurdle of safety inspection and are collecting residents' consent forms to designate maintenance zones. Some complexes are promoting projects with trust companies to expedite the process. Mokdong 10 Complex recently signed a business agreement with Korea Land Trust. Mokdong 14 Complex partnered with KB Real Estate Trust. To catch up on the delayed pace, Mokdong 9 Complex selected Korea Asset Trust as a preliminary trust company in May.

As reconstruction becomes more visible, despite being a land transaction permission zone, transaction volumes in the area are steadily increasing. In Mokdong and Sinjeong-dong, where New Town apartments are located, the number of sales transactions rose more than fourfold from 30 in January to 127 in June.

With active transactions, rebound sales are also emerging one after another. A 55㎡ unit in Mokdong 14 Complex changed hands for 1.115 billion KRW on the 14th. The price, which had dropped to 920 million KRW in February this year, recovered by nearly 200 million KRW in four months. A 95㎡ unit in Mokdong 6 Complex, which has the fastest reconstruction speed due to the rapid integrated planning, was sold for 1.99 billion KRW on the 30th of last month. This price is 20 million KRW higher than the 1.79 billion KRW recorded in February.

A representative from a Mokdong real estate agency said, "In the case of Complex 7, which is located right next to Mokdong Station, a 74㎡ unit was recently traded for 2 billion KRW," adding, "Despite being a land transaction permission zone, Mokdong has many actual buyers entering for the school district, so the real estate market is reviving, and as reconstruction expectations grow, prices are rising with each transaction, creating a positive atmosphere."