After Seoul Mayor Oh Se-hoon announced plans to lift the land transaction permit system, expectations are rising in the area known as 'Jamsamdaechung' (located in Jamsil-dong, Songpa District; Samsung-dong, Gangnam District; Daechi-dong, Gangnam District; and Cheongdam-dong, Gangnam District). These areas have been subject to extensive land transaction permit regulations due to their proximity to the 'international exchange complex district,' which has prohibited gap investment involving Jeonse. The market anticipates a significant possibility of a transition to a 'pinpoint' regulation at the administrative district level.
According to the real estate industry on the 28th, the Seoul Metropolitan Government is reviewing plans to lift the land transaction permit system, focusing on 'Jamsamdaechung' in Samsung-dong, Gangnam District, and its surrounding area (14.4 square kilometers) as early as next month. This area is linked to significant development opportunities, including the Jamsil MICE Complex, the Hyundai Motor Global Business Center (GBC), and the underground space complex development on Yeongdong-daero. Designated as a land transaction permit zone on June 23, 2020, it has been reassigned each year, totaling five years.
The land transaction permit system is designated for areas where development projects are underway or planned, where speculation is rampant, or where land prices are soaring. Real estate transactions require approval from local government officials. For residential properties (over 18 square meters), there is a two-year mandatory residency requirement, making gap investment impossible.
During a 'Great Debate to Ease Regulations and Revitalize Livelihoods' on the 14th, Mayor Oh noted, 'We are actively reviewing the plan to lift the designation of land transaction permit zones as a special measure.'
Following this statement, there was a sense of relief in the regions bound by the land transaction permit system. Specifically, in the case of 'Jamsamdaechung,' it is expected to be lifted, as the renewal of the land transaction permit zone is imminent in June. Given the extensive regulations in place and that key development projects are expected to be completed around 2030, many have argued that maintaining the land transaction permit system until then would be excessively regulatory. Furthermore, the justification for the permit system, aimed at 'preventing price surges,' has dissipated.
Lee Chang-moo, a professor in urban engineering at Hanyang University, stated in a discussion on the land transaction permit system that there was a -9.5% stabilization effect on house prices in the two years following its implementation, but that effect has become negligible after four years.
Ham Young-jin, head of real estate research at Woori Bank, noted, 'While there are significant opportunities in the 'Jamsamdaechung' area, it has been designated as a land transaction permit zone for a long time, so some lifting seems likely. The recent decrease in transaction volume and the slight downward adjustment of home prices in Seoul have eased the burden regarding deregulation.'
There are predictions that the land transaction permit system applied to the 'Jamsamdaechung' area will be entirely lifted in June, followed by 'pinpoint' designations.
As there has been significant criticism regarding the infringement of property rights and freedom of relocation due to widespread regulation, it is believed that designations will only occur in areas where justification is clear. The most likely scenario is designating at the administrative district level, a plan suggested by Lee Sang-wook, a Seoul City Council member (urban planning committee). Jamsil-dong is divided into areas such as Jamsil 2-dong (ELS, Licent), Jamsil 3-dong (Trizium, Lake Palace, Jamsil Jugong 5 Complex), and Jamsil Bon-dong. Daechi-dong is also divided into Daechi 1-dong (Gaepo Woosung, Seonggyeong, Raemian Daechi Palace, etc.) and Daechi 2-dong (Eunma, Mido, etc.).
There are also opinions suggesting that the designation of the land transaction permit system should be reduced, focusing on the rapid integrated planning redevelopment sites in Seoul. Professor Lee Chang-moo mentioned, 'If a decision is made to lift the designation around the GBC, reassignment for rapid integrated planning sites will be a necessary option.'
Park Hap-soo, a concurrent professor at the Graduate School of Real Estate at Konkuk University, stated, 'In 'Jamsamdaechung,' it is possible to leave areas such as Daechi Eunma, Woosung, Seonggyeong, and Mido primarily for redevelopment, and it seems likely that after the overall lifting of the designation coming in June, focusing on rapid integrated planning sites will be the main strategy.'