Re-designation Likely for Land Transaction Permit Zones in Gangnam 3 Districts and Yongsan... Mapo and Seongdong Undecided [Real Estate AtoZ]

Expiration at the End of September: Experts Predict Re-designation
Minister of Land, Infrastructure and Transport Requests Re-designation from Seoul
Ministry Likely to Designate Mapo, Seongdong, and Other Districts

As the expiration of the land transaction permit zones (LTPZ) in Seoul's Gangnam, Seocho, Songpa, and Yongsan districts approaches at the end of this month, there is growing speculation that these zones are highly likely to be re-designated. Since the Ministry of Land, Infrastructure and Transport (MOLIT) is moving to expand the minister's authority to designate LTPZs and is considering adding Mapo and Seongdong districts, the prevailing view is that the existing zones are unlikely to be lifted.

On the 27th, apartment prices in Mapo and Seongdong districts of Seoul rose at the highest rate since related statistics began to be published in 2013. It is expected that the upward trend in Seoul apartment prices will continue for the time being due to the anticipation that prices will rise further. The photo shows the view of apartment complexes in downtown Seoul from Namsan Mountain. 2025.06.27 Photo by Dongjoo Yoon

According to the industry on the 16th, the designation period for LTPZs covering about 2,200 apartment complexes (a total of 110.65 square kilometers) in the three Gangnam districts and Yongsan district will expire at the end of this month. Seoul city must soon decide whether to re-designate these zones. To this end, the city recently invited MOLIT officials and experts to gather opinions on re-designating the LTPZs in the three Gangnam districts and Yongsan. Kim Yoonduk, Minister of Land, Infrastructure and Transport, said in a recent media interview, "We have conveyed our position that re-designation is desirable."

The likelihood of re-designation is further increased by the ongoing initiative (the September 7 Supply Measures) to expand the central government's authority to designate LTPZs. On the 5th, Democratic Party lawmaker Chun Junho and others proposed a partial amendment to the "Act on Report of Real Estate Transactions, etc." containing these measures. The market expects it will take about two months for the bill to pass at the earliest. If enacted, the law would enable a swift response to changes in housing prices.

At a pre-briefing on the September 7 Supply Measures, Lee Changgyeong, Vice Minister of MOLIT, pointed out, "Until now, the Seoul mayor designated the zones at the request of MOLIT, but the city and the ministry may have different perspectives. If the authority is given to the minister, it will allow for better responses to future market conditions." Recently, while housing prices have fluctuated in Seoul's Mapo, Seongdong, and Gangdong districts, as well as in Gwacheon and Bundang in Gyeonggi Province, the relevant local governments have not responded.

Seoul apartment prices have been steadily rising, and if the zones are lifted, prices are likely to rise even further. According to the August housing price trend survey by the Korea Real Estate Board, the month-on-month change in the sales price index was 1.20% in Songpa, 1.06% in Yongsan, 0.61% in Seocho, and 0.54% in Gangnam.

Residential area in Seongdong-gu. Photo by Jo Yongjun

Ham Youngjin, head of the Real Estate Research Lab at Woori Bank, said, "Although transactions have slowed since the announcement of the loan regulations (June 27) and supply measures, the increase in sales prices remains larger than in other regions, and prices are holding steady. With growing expectations for interest rate cuts, the likelihood of re-designation is high." He added, "While there may be concerns that re-designating LTPZs infringes on individual property rights, re-designation is inevitable."

Yang Jiyeong, head of Asset Management Consulting at Shinhan Investment & Securities, also analyzed, "Lifting the zones would inevitably stimulate housing prices and would not align with the current government's policy direction, so re-designation is inevitable. A one-year designation period is more reasonable than six months."

The majority of experts predict that, considering the local elections in June next year, MOLIT is likely to designate Mapo, Seongdong, and areas such as Gwacheon together as LTPZs. Yoon Sumin, real estate specialist at NH Nonghyup Bank, said, "The ministry has expressed a strong intention to re-designate the existing zones, making it difficult for the city to avoid. There will also be deliberation over whether to include Mapo and Seongdong as well."

Kim Inman, head of Kim Inman Real Estate Economic Research Institute, said, "Since the zones were lifted in February and caused confusion, it will be difficult to lift them again. I think the designations will be expanded to include Mapo, Seongdong, Gangdong, Gwacheon, and even Bundang. Gangdong has already become a 'hot market.' If it is difficult to leave things as they are, there is also the option of designating these areas as adjustment target zones or speculative overheating zones."

On the other hand, Ham Youngjin noted, "It may be difficult to designate the zones immediately after the announcement of loan regulations and supply measures. It is likely that the authorities will monitor transaction volumes and prices for several months, and if signs of overheating appear, MOLIT will designate the zones through legal amendments. There is also a possibility that the designation will be held back to be included in the next set of real estate measures."