High-End Apartment Cluster Expected to Reemerge as a 'New Wealthy Neighborhood'
NH Investment & Securities announced on the 25th that it has published a report titled 'In-depth Analysis of Bangbae-dong Reconstruction_Project Status and Feasibility Analysis by District.'
The report includes an assessment of the project status, characteristics, and issues of each reconstruction site in Bangbae-dong, along with market trends and feasibility analysis to provide future outlooks. NH Investment & Securities forecasts that Bangbae-dong will be reborn as a "new affluent residential area" densely populated with luxury apartments within the next five years through reconstruction projects. Bangbae-dong is characterized by a mix of typical apartment reconstruction and detached house reconstruction projects. Detached house reconstruction involves rebuilding old detached, multi-family, and row houses into apartments. Although similar to redevelopment, the difference lies in the fact that infrastructure is already in place, so no additional installation is needed, making the projects more feasible.
Excluding completed projects, there are six ongoing detached house reconstruction projects in districts 5-7 and 13-15, while four apartment reconstruction complexes?Bangbae Samik, Shindong-A, Samho (1st & 2nd phases, buildings 10 & 11), and Shin Samho (Samho 4th phase)?are actively progressing. Among these, the fastest-moving site is Bangbae District 6, with occupancy scheduled for October 2025, followed by District 5, expected to be ready by August 2026. Construction is currently underway at Bangbae Samik, targeting occupancy in 2026.
Key issues in the projects include the Reconstruction Excess Profit Recovery System (hereafter, REPRS) and regulatory zones. High REPRS charges act as a factor that reduces project feasibility. Districts 5, 6, 13, and 14 in Bangbae applied for management disposition approval before December 31, 2017, thus are exempt from REPRS. However, for projects subject to REPRS, the burden is expected to decrease due to amendments to the REPRS law by the end of 2023. Additionally, since Bangbae-dong is part of Seocho-gu and designated as a speculative overheating zone and an area subject to the price ceiling system, restrictions on the transfer of association member status and sale prices may impact project progress.
Important factors when reviewing feasibility include the proportional rate, floor area ratio, and land share. Detached house reconstruction is particularly significant because, like redevelopment, appraisal values vary by property, so the proportional rate can either reduce or increase the contribution amount. District 5, scheduled for general sale in August, planned a member sale price of approximately 40 million KRW per pyeong and a general sale price of about 51 million KRW per pyeong, but these prices may rise due to increased construction costs.
Jang Bohyun, Senior Researcher of Real Estate at NH Investment & Securities Tax Center (NH WM Masters Specialist), stated, "Once the relay occupancy of luxury apartment complexes begins in an area densely populated with high-end housing, the diverse distribution of real estate types, wide green spaces, and excellent school districts will transform Bangbae-dong into a distinctive affluent area in Gangnam." He added, "Since most projects are currently under construction or demolition, occupancy within five years is highly likely, making it a valid time to purchase now. However, as it is a price ceiling area, homebuyers with high scores who do not own a home should prioritize applying for subscription." Jung Yuna, Lead Researcher of Real Estate at NH Investment & Securities, explained, "Bangbae-dong has many detached house reconstruction projects, so overall feasibility is good. However, since rights values vary like in redevelopment, it is important to carefully analyze the burden of REPRS, association member contributions, and profitability based on premiums."
The full report can be accessed on the official NH Investment & Securities blog.
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