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With this in mind, there is an analysis that it may have been to appease the rebuilding public ahead of next year’s elections, and the market’s expectations are inflated.
Will there be deregulation measures in Eunma after Yeouido?
According to the Seoul Metropolitan Government and the maintenance industry on the 22nd, the city decided to announce the district unit plan for the apartment district in Yeouido as early as next month (including the integrated development of Sambu and Mokhwa and easing of the floor height), and on the 31st, it will also be connected with Eunma Apartment in Daechi-dong, a barometer for reconstruction in Gangnam. We decided to hold a community meeting. At this meeting, the ‘Private Land Purchase’, which was proposed as a condition of former Mayor Park Won-soon before the proposal and deliberation of the maintenance plan, will be put on the table.
An official from the Promotion Committee said, “There are two entrances to Eunma Apartment, one is facing the road in a ‘T’ shape and the other is at a 15-degree angle to the road, so it was the city’s request to make it straight.” The private land is worth more than 100 billion won, including the buildings, so how can I buy it?” he said. The official also expressed his anticipation, saying, “If this condition is not met, the traffic impact assessment and the deliberation of the maintenance plan can be carried out quickly.”
Real estate experts predict that only passing the Daechieunma maintenance plan will have a big impact on the reconstruction market.
Shim Gyo-eon, a professor of real estate at Konkuk University, said, “If the reconstruction market is frozen by the government regulations and the renovation plan of Daechieun-ma, which is called the barometer of Gangnam reconstruction, passes through the city, it will have a huge impact on the market.” There are a lot of regulations out of the hands of the city, such as the water-return system, so close consultation between the city and the government is needed to activate supply through reconstruction.”
Mayor Oh said through his SNS on the 20th, “Please loosen the regulations on safety diagnosis for reconstruction, which the Ministry of Land, Infrastructure and Transport has authority over. There will be no choice,” he emphasized.
Even if the city provides administrative support for the revitalization of reconstruction, it is not easy to supply housing in the city center through the maintenance project if the regulations on the ‘recovery of excess profits’ and safety diagnosis, which are the ‘nail regulations’ in the reconstruction project, cannot be resolved. For this reason, Mayor Oh has been continuously demanding that President Moon Jae-in and the Ministry of Land, Infrastructure and Transport release safety diagnosis regulations from the beginning of his inauguration in April.
Before the election, ‘regulation first → activation mode’
Mayor Oh is in a position to reduce the structural safety weight among safety diagnosis evaluation items from 50% to 30% and to put more weight on the aging of facilities and the residential environment. If you look at the weight of each item, structural safety is 50%, facility aging is 25%, residential environment is 15%, and cost analysis is 10%. For this reason, it is not easy to pass the reconstruction safety examination if the structure itself is strong even for an old apartment with an old appearance and rust.
Mayor Oh could hardly speed up the rebuilding revitalization like his aspirations at the time of the nomination. Immediately after the election of Mayor Oh, the market’s expectations were reflected in the market price, and house prices in major reconstruction complexes in Seoul soared.
At the end of April, the public sentiment in the reconstruction market was shaken when a super-strong card was issued that designated the land transaction permission zone (Apgujeong, Yeouido, Mokdong apartment district and Seongsu strategic maintenance zone). Even after that, there was a public opinion against Mayor Oh as they advanced the qualifications for acquiring the status of maintenance business union members to ‘after passing safety examination’ and ‘after designation of maintenance area’, respectively.
Real estate market experts analyzed that as Mayor Oh’s term is scheduled for June next year, he will try to give the market an active housing supply signal. Although there may be a temporary price increase in some complexes, unless the government removes the nail regulations, there will be no sharp rise like in the first half, and it is expected to help stabilize the market in the mid- to long-term.
Lee Eun-hyeong, a senior researcher at the Korea Construction Policy Research Institute, said, “It will show that Mayor Oh, who has been implementing regulatory policies while showing a sharp rise in house prices centering on reconstruction complexes, has made efforts to revitalize reconstruction even at the city level ahead of next year’s elections.” It is difficult to achieve concrete results without the government’s cooperation to ease safety diagnosis regulations.”
Koh Jun-seok, an adjunct professor at Dongguk University’s Graduate School of Law, said, “The solution to stabilizing house prices is ultimately in strengthening supply.” “As a signal to expand supply through deregulation even in large-scale reconstruction complexes, there may be price increases in some complexes in the short term, but long-term market stabilization. It will help.”
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