Villas in Seoul urban-complex project candidate areas command premiums of hundreds of millions of won; construction set to begin in 2030

[Financial News]The area around a villa complex in Yangcheon District, Seoul, visited on the 18th. Since it was selected as a candidate site for the Ministry of Land, Infrastructure and Transport’s urban public housing complex project (urban-complex project) at the end of last month, demand for purchases has risen sharply. Inquiries seeking properties have also surged at real estate agencies in the area. “Some villas have seen premiums of around 400 million won added around the time of the announcement,” one agent said. “Interest is pouring in regardless of whether the units are semi-basements, on the first floor or on the second.”The urban-complex project is a public-led development initiative for residential areas where it is difficult to pursue private-sector redevelopment. On September 30, as a follow-up to the August 13 measures to accelerate housing supply, the Ministry of Land, Infrastructure and Transport confirmed 11 new candidate sites across 10 Seoul districts, including two in Gwangjin District. The project is expected to provide about 18,000 homes.
Real estate agents in Yangcheon District unanimously said, “A premium hasn’t even been added yet.” They said the current premium of around 300–400 million won is expected to jump to 600–800 million won once the project gets fully underway.
Most of the other candidate sites have also seen premiums of around 100–300 million won. A real estate agent near a candidate site in Yongsan District confided, “There’s a listing for a 33-square-meter villa currently asking around 700 million won. It was priced at around 500 million won before the area was designated as a candidate site.”
Inquiries are also reportedly pouring in from newlywed couples in their 30s and 40s looking to pursue “body-tech”—living in a property in hopes its value will rise. A real estate agent in Gwangjin District said, “A villa I brokered for a price in the mid-300-million-won range last October rose by more than 300 million won in a year.” The agent added, “Development is taking place in several areas of Gwangjin District, so prices are continuing to rise steadily.”
Some are also urging caution about investing. The area is still only a candidate site and has not yet reached the stage of formal designation as a redevelopment district. The first hurdle, preliminary district designation, will not be possible until the first half of next year.
To be designated a complex district, the project must then secure consent from at least two-thirds of the owners of land, etc., and from owners representing at least half of the land area. Under current law, preliminary district designation will be revoked if consent forms are not secured within one year of the public notice seeking residents’ opinions. In that case, the possibility that villa prices could fall cannot be ruled out.
The Ministry of Land, Infrastructure and Transport is targeting 2030 for the start of construction, but if the process is delayed from the very first stage, the project itself could be held up. In fact, in Section A of Gwangjin District, where the district designation was revoked, some urgent-sale listings were offered for several tens of millions of won below market prices. A real estate agent near Gwangjin District advised, “It’s true that villa prices rise at each stage of development,” but added, “There are also variables, so a cautious decision is needed.”
[email protected] Kwon Jun-ho Reporter