Experts Say "Speed of Land Compensation is Key... Difficult to Control House Prices" [GB Release 50,000 Houses]

Government to Lift Greenbelt Restrictions in Four Seoul Metropolitan Areas Including Seoripul District
"Excluding Long-Term Rentals, 9,000 Households in Seoul, Minimal Impact on Demand Diversion"
"Reducing Compensation Disputes Can Align Supply Timing"
"Considering Location and Scale, Limited Effect on Lowering Seoul Downtown Housing Prices"

The government announced that it will lift the greenbelt for the first time in 12 years to supply 50,000 new housing units in the Seoul metropolitan area, but experts have assessed that the effect on stabilizing housing prices will be minimal. While selecting areas with already secured transportation networks was appropriate, they evaluated that the scale and location of the supply are not attractive enough to disperse housing demand in Seoul. To enhance the effect, the timing of supply should be advanced, and reducing disputes such as land compensation will be key, they agreed.

"Areas where demanders need... securing transportation networks is positive"

Experts evaluated that the greenbelt areas recently decided to be lifted?▲Seoul Seocho-gu Seoripul District ▲Goyang Daegok Station Area ▲Uiwang Ojeonwanggok ▲Uijeongbu Yonghyeon?have locational advantages as transportation networks are already secured.

Park Hapsu, adjunct professor at Konkuk University Graduate School of Real Estate, explained, "The Yeomgok, Naegok, and Wonji-dong areas in Seocho-gu are prime greenbelt areas remaining in Gangnam," adding, "They have excellent transportation connectivity to downtown Seoul via the Shinbundang Line without straying far from Gangnam." He continued, "Daegok in Goyang has always been mentioned as the top priority whenever new towns were announced," and evaluated, "It is a place where a large-scale technovalley is planned in the northwest area like Pangyo, so the value of lifting the greenbelt is sufficient." Professor Park said, "The key to suburban land development around Seoul is solving transportation issues, and if these are not resolved by the time residents move in, it tends to remain a difficult problem like Wirye or Gimpo New Town," adding, "Deciding to lift the greenbelt in areas where transportation development plans are already established is an appropriate measure."

Park Wongap, real estate specialist at KB Kookmin Bank, also evaluated, "Lifting the greenbelt around station areas to build many houses will have a significant effect on expanding supply," and said, "Rather than building new towns in inconvenient outer areas to indirectly expand housing supply, they chose a direct approach by focusing on areas where demanders need housing." He also predicted, "The recent rise in Seoul apartment prices was influenced not only by expectations of interest rate cuts but also by anxiety about housing supply, and this announcement will help stabilize the market to some extent."

Contrary to expectations, Gangnam and Songpa areas excluded... effect on demand dispersion is 'questionable'

Some view that the effect of dispersing housing supply will not be significant as Gangnam and Songpa areas were excluded contrary to prior expectations. The greenbelt areas in Seoul announced this time are around Wonji-dong, Sinwon-dong, Yeomgok-dong, Naegok-dong, and Umyeon-dong in Seocho-gu. The government plans to supply 20,000 housing units, of which 11,000 will be supplied as Long-term Jeonse Housing II for newlyweds. Kim Hyoseon, senior real estate specialist at NH Nonghyup Bank, said, "Half of Seoul's supply scale is allocated to long-term Jeonse rental housing, so the actual effect is only about 9,000 units," adding, "Rather than acting as a substitute for overheated housing demand and influencing the market, it is more likely to have a lottery-like effect for specific demand groups."

Song Seunghyun, CEO of Urban and Economy, pointed out, "The location and quantity are less than expected. The effect of dispersing demand to lower housing prices through supply expansion will not be significant," and added, "There are limits to lowering housing prices in Seoul's major overheated urban areas." Lee Eunhyung, research fellow at the Korea Institute of Construction Policy, said, "Considering that large apartment complexes in Seoul are about 10,000 units in scale, this supply scale can be thought of as dispersing such an apartment complex into 3 to 4 developments," and added, "The effect on the relevant areas will be about that much."

There are also criticisms that increasing the supply volume and advancing the timing of previously announced housing supply such as the 3rd New Town is more effective within the broader framework of supply expansion. Professor Park Hapsu said, "If the floor area ratio of the 3rd New Town had been increased to expand supply, there would have been no need to announce lifting the greenbelt this time," and pointed out, "Some parts of the 3rd New Town announced four years ago have yet to complete land compensation for the sites. We need to properly review the previously announced measures first."

To avoid 'false hope,' speed must be increased... land compensation is key

There are calls to accelerate the project speed to maximize the effect of this measure. Research fellow Lee Eunhyung said, "The more specific the policy content, the more it is reflected in market sentiment," adding, "The more potential homebuyers weigh whether it is worth waiting while renting, the more the market stabilization effect changes." The government also presented a roadmap to shorten administrative procedures: designating public housing districts in the first half of 2026, first sales in 2029, and first move-ins in 2031. Usually, it takes about 10 years from lifting the greenbelt to actual move-in, but they plan to shorten this to 7 years.

Experts see the rapid completion of land compensation as more important than any other procedure. Committee member Park Wongap said, "To speed up development, disputes over compensation must be minimized," and predicted, "This will be the biggest issue in this housing supply." Senior specialist Kim Hyoseon said, "Since greenbelt land is unused, negotiations may be relatively easier with just land appraisal," adding, "We need to leverage this advantage to speed up the process." CEO Song Seunghyun also pointed out, "The process may be delayed due to compensation procedures, cultural heritage issues, or project feasibility."

"Since it's happening anyway, increase floor area ratio for dense development," "Lifting greenbelt is outdated"

There are also voices that the idea of supplying housing by lifting the greenbelt goes against the trend of the times. Senior specialist Kim Hyoseon said, "While countries like Japan and Singapore are implementing urban planning to respond to climate change, it makes me wonder if supplying housing in Seoul, which has the highest urban competitiveness domestically, in a way similar to 12 years ago is appropriate for the times," adding, "If you lift protected areas, there should be dramatic housing stabilization effects, but it is difficult to expect in terms of timing and volume."

There is also an opinion that since the greenbelt is being lifted anyway, floor area ratios should be boldly increased for high-density development. Professor Park Hapsu said, "Considering this is practically Seoul's last greenbelt, dense development is necessary," and added, "Currently, the floor area ratio can be increased to about 250%, but like the 1st New Towns, it is necessary to raise it to 300-350% and relax height restrictions to 30-40 floors to increase volume."