[서울신문] Will the’Gangnam Undefeated’ Public Reconstruction Carrot Book Work?

[뉴스를 부탁해] The direction of the 2·4 countermeasures’Gangnam house price’

The Moon Jae-in regime, which declared the’war with Gangnam’, came up with the 25th real estate countermeasure on the 4th. As a public reconstruction and redevelopment project, it contained a self-proclaimed’supply shock’ level plan to supply 836,000 houses nationwide, including 320,000 units in Seoul alone by 2025. To this end, incentives such as exemption from the reconstruction excess profit burden and exemption for 2 years of actual residence were given to public consignment for the reconstruction and maintenance projects conducted by the private sector along with the high-density development of the station area. The government’s challenge to catch the house price in Gangnam, can it succeed this time?

The Moon Jae-in administration chose Gangnam as the source of the real estate craze throughout the term. Since 2017, it has been pouring out constant demand suppression policies such as reconstruction regulation, lending reduction, and holding tax strengthening, but the results have been devastating. The government’s high-ranking multi-housing personnel were also forced to dispose of houses other than one house, but when they tried to leave an expensive apartment in Gangnam, they were faced with a headwind that proved’Gangnam indefeat’. As Kangnam’s house prices didn’t move as expected, Kim Sang-jo, head of the Blue House Policy Officer at the beginning of last year, appeared on a radio and said, “It is impossible to stabilize all apartment prices by policy. Honestly, the primary goal is to stabilize the housing price in Gangnam.

● Gangnam, who played again even in regulation… Seoul leads the rise

In Gangnam, the local name itself is known as a’brand’. There are prestigious high schools collectively referred to as Gangnam 8th School District (Seocho, Gangnam-gu), and transportation and cultural infrastructure are well established, so the price rises even if it is pushed by regulations. The government regulation rather increased the barrier to entry, enhancing the attractiveness of Gangnam. When loans were blocked to prevent speculative demand, the ladder of transfer of non-Gangnam residents broke, and the anger and desire of the whole people toward Gangnam apartments increased in size.

In fact, home prices in Gangnam, which seemed to be slowing down by previous regulations last fall, have risen again from December. In particular, the regulation of loans aroused fear of homeless people, boosting the prices of low and mid-priced apartments in non-Gangnam regions as well as local apartment prices, and the nationalization of the regulated areas had a psychological effect that looked cheaper in Gangnam. The strengthening of the ownership tax has resulted in a higher price for apartments in Gangnam due to the sensation of’one smart house’.

In fact, according to the Korea Real Estate Agency, the rate of increase in weekly apartment prices in Seoul in the first week of February (as of the first day) rose 0.1%, up from the previous week (0.09%). This is the highest increase in seven months. Songpa-gu (0.17%) showed the largest increase in Seoul. Gangnam-gu (0.12%) was mainly in Dogok-dong and Jagok-Segok-dong, while Seocho-gu (0.10%) was mainly Jamwon-dong reconstruction complex and Seocho-dong. Gangnam District 3 steadily led the rise in Seoul.

Since the announcement of the June 17th and July 10th measures last year, the price of apartments in Seoul has stabilized at 0.01 to 0.03% in August and November, but increased weekly from December to 0.06 to 0.09% in January this year. Reported transactions continued into the new year. At the beginning of last month, 84.81m2 (12 floors) of Gaepowooseong, Daechi-dong, Gangnam-gu, recorded the highest price at 2.85 billion won. Considering that the transaction on the 9th floor of the same area in June of last year was 2.54 billion won, the increase of 310 million won in six months.

As the situation worsened, the government, which announced the stability of prices in Gangnam as the first priority, pledged to supply 136,000 households (the number of redeveloped households only) to major downtown areas such as Seoul this time following the third new city last year. Of course, this is a measure that is almost the same as the 8 and 4 measures introduced last year, and is a number that is assumed to take into account the participation rate of public redevelopment competition (25.9%) at the time.

The government has also issued unconventional incentives this time to induce participation in the reconstruction project. However, the message that the’public’ will lead rather than leaving it to the’market’ is stronger than last year’s August 4th measures. The public maintenance project that came out last year was a concept that the public helped the private sector. However, the reorganization plan proposed this time is characterized by being implemented with the ownership of the land secured at all. It means that the government directly plays the role of the implementer. It was the same that a certain portion of housing, such as rental housing, was accepted for donations.

●Government enforcer… Resilience of “property infringement”

Experts predict that if supply increases as planned by the government, prices will stabilize in the mid to long term. For this, it is predicted that participation in major Gangnam complexes will be a key measure of success. However, the response of major reconstruction complexes in the Gangnam area, which will judge its success, is in a gloomy state. It is judged that Gangnam can secure sufficient business feasibility even if it is not’public’. There was also a great reluctance to’public’.

The president of the A reconstruction apartment in Songpa-gu strongly objected to the mandatory public lease, saying, “Public reconstruction is an excessive violation of the government’s property rights.” In addition, he added, “Even if the residents choose the construction brand, all the rest will be transferred to the public, but the option of residents will be narrowed and it will be an obstacle to the high-end business.”

An official from an official agency B of a reconstruction preparation complex in Gangnam-gu also said, “If it is going to be’public’, the customer’s reaction to why investing in Gangnam is common.” I doubt it,” he added.

As the number of rental apartments increases when public reconstruction is carried out, the land shares of existing members

This decreases and the overall union profit decreases. Even if they receive benefits such as an increase in floor area ratio, the existing members believe that the quality of housing will decline due to the increased population density. If the number of rented apartments is large, it is difficult to apply a high-end image to the complex, which will hinder the sale price. There is no reason to participate in’public reconstruction’ as a business site with a better location.

●“The scarcity of Gangnam apartments may increase after redevelopment”

Although the government announced the supply plan, it is analyzed that the Gangnam house price is unlikely to fall. This is because literally it is still just a’plan’. Even if major Gangnam complexes participate in public reconstruction and the period of progress is shortened, it will take 5-6 years. The government’s plan is to provide housing by 2025, but it is not a number that can be’moved in’ right away. There is also a variable called the Mayor’s re-election in April.

Ji-Hae Yoon, Senior Research Fellow of Real Estate 114 said, “For Gangnam house prices, the demand regulation policy must be effective and supply must be secured for a long period of time in Gangnam and surrounding areas, but this measure will make it difficult for the Gangnam substitution effect to appear quickly.” With this cash settlement target, there is a possibility that the demand class in the redevelopment area will depart, increasing the polarization of apartments and non-apartments, and increasing the scarcity of Gangnam apartments excluding redevelopment and redevelopment complexes in the short term.”

Although the direction of supply is correct, there are still skeptical gazes on the way of progress such as high-density development or excessive regulation. An industry official who requested anonymity said, “The rise of Gangnam real estate is a matter of relative deprivation and desire, not because of lack of apartments.” “If three apartments in Bundang are supplied to Seoul, including Gangnam, the subway will become hellish. Car movement will also be terrible.”

Reporter Myeong Hee-jin [email protected]