"Signing Contracts Without Even Seeing the House, Withdrawals of Listings in Ilsan Seondo District"

Ilsan Seondo District Gangchon Village Complexes 3, 5, 7, 8
Inquiries from Buyers and Sellers Continue After Designation Announcement
Estimated 300 Million KRW Maintenance Fee for 30-Pyeong Units
"Floor Area Ratio Incentives Needed to Enhance Project Feasibility"

"The homeowner who asked to sell yesterday is saying today that they won't sell. Many are saying they will sell at a higher price." (Real estate agent A near Gangchonmaeul Complex 5)

"A buyer put down a deposit without even seeing the house, and one unit was sold." (Real estate agent B near Gangchonmaeul Complex 7)

A view of Gangchon Village 7 Complex in Madu-dong, Ilsandong-gu, Goyang-si, Gyeonggi-do, selected as a pilot district for the redevelopment of the first-generation new towns announced by the Ministry of Land, Infrastructure and Transport on the 27th. Photo by Han Jinju

On the 27th, real estate agencies near Gangchonmaeul Complexes 3, 5, 7, and 8 in Madu-dong, Ilsandong-gu, Goyang-si, Gyeonggi-do, were flooded with inquiries via landline and mobile phones. After the Ministry of Land, Infrastructure and Transport announced that Gangchonmaeul Complexes 3, 5, 7, and 8 were included in the first phase new town redevelopment pilot district, inquiries from buyers and contacts from sellers trying to withdraw their listings continued. Despite it being a weekday and the harsh weather with heavy snowfall, the agencies were busy handling the flood of calls and visitors.

Homeowners withdrawing listings after pilot district designation

A representative from real estate agency A near Gangchonmaeul Complex 5 said, "Transactions had been quiet since the end of September, but as soon as the Ministry of Land announcement came out, calls started pouring in from the afternoon, and many sellers are now holding off on transactions," adding, "Some homeowners who initially listed at 650 million KRW for a 32-pyeong (84㎡) unit are now saying they want to raise the price by 50 million KRW."

The situation was no different near Gangchonmaeul Complex 7. The head of real estate agency B said, "I just showed a house, and I heard that buyers are lining up. One buyer put down a reservation deposit without even seeing the house and left," adding, "With expectations rising due to the pilot district designation, asking prices seem likely to increase." Although sales had slowed after loan regulations tightened, last month a 101㎡ unit in Complex 7 changed hands for 890 million KRW and 950 million KRW.

A view of Gangchon Village Complex 5 in Madu-dong, Ilsandong-gu, Goyang-si, Gyeonggi-do, selected as a pilot district for the redevelopment of the first-generation new towns announced by the Ministry of Land, Infrastructure and Transport on the 27th. Photo by Han Jinju

Gangchonmaeul Complexes 3, 5, 7, and 8 have a total of 3,616 households, making them the largest among the selected pilot districts in Ilsan. After reconstruction, it is expected to become a large complex with about 6,000 households. The complexes consist of △ Gangchonmaeul Complex 3 Family with 590 households (completed in 1992), △ Complex 5 Life with 1,558 households, △ Complex 7 Seon-gyeong Kolon with 702 households (completed in 1993), and △ Complex 8 Woobang with 766 households. Except for Complex 5, which has many small units, most are medium to large-sized units. The floor area ratio is in the 180% range except for Complex 5 (163%). Complex 5 has many small units but includes low-rise buildings of five floors, with a land share of 10 pyeong for a 47㎡ (14-pyeong) unit. It is located in an ultra-station area near Madu Station on Line 3 and is adjacent to schools such as Baekseok Elementary, Jeongbal Elementary, and Baekseok High School, making it a highly preferred residential area.

Passed the first hurdle, but profitability remains a challenge: "Ilsan needs floor area ratio incentives"

Although Gangchonmaeul Complexes 3, 5, 7, and 8 were selected as pilot districts, to accelerate redevelopment, profitability must be improved. Residents of Ilsan argue that the standard floor area ratio of 300% is lower compared to Bundang (326%), and additional incentives are needed to ensure profitability. The preparatory committee estimates that the estimated contribution fee would be around 300 million KRW for a unit of the same size (84㎡).

The resident consent rate submitted before the pilot district selection evaluation for Gangchonmaeul Complexes 3, 5, 7, and 8 was 88%. Going forward, residents will need to provide consent twice more for the pilot district designation and special redevelopment zone designation. Minimizing the estimated contribution fee is key. Jang Seong-hee, chairman of the Gangchonmaeul reconstruction preparatory committee, explained, "Compared to other areas in Ilsan, residents were enthusiastic about reconstruction, but it is important whether residents can bear the estimated contribution fee notified before the redevelopment zone designation," adding, "We are requesting Goyang City to grant as much floor area ratio incentives as possible and to keep public contributions at a level that does not undermine profitability."

The view of Gangchon Village Complex 7 in Madu-dong, Ilsandong-gu, Goyang-si, Gyeonggi-do, selected as the first phase new town redevelopment pilot district announced by the Ministry of Land, Infrastructure and Transport on the 27th. Photo by Han Jinju

There are also concerns that if the project stagnates in the pilot district, it could negatively affect reconstruction throughout Ilsan. The head of real estate agency C in Gangchonmaeul said, "I am worried that setting the floor area ratio at 300% only for Ilsan will increase residents' contribution fees," adding, "The Ilsan area itself is aging, and if the first pilot district sale fails, the other complexes could face even greater difficulties, so the floor area ratio issue needs to be resolved."

The next step after pilot district designation is the establishment of a special redevelopment plan. The Gangchonmaeul preparatory committee plans to hold a resident briefing session within the year and gather residents' opinions on the implementation method, including trust and association methods. Chairman Jang said, "If the public contribution ratio exceeds only 10%, the safety inspection is exempted, so we are preparing for the next step, the redevelopment plan establishment," adding, "Gangchonmaeul was developed as the first phase of Ilsan New Town and is expected to have the best profitability in Ilsan."