Regarding the privately led dwellings supply plan "Fast-track integrated planning 2.0," which Seoul Mayor Oh Se-hoon announced on the 29th, the market offered positive reviews, saying it "pinpointed on-the-ground details." However, some analysts say prices could rise in the short term in parts of the Han River belt where reconstruction and redevelopment projects are actively underway, such as Jamsil in Songpa District and Noryangjin in Dongjak District.
"Fast-track integrated planning (Shintong planning) 2.0" mainly aims to shorten project timelines by one more year for maintenance projects such as reconstruction and redevelopment through improvements to permitting procedures and regulations. "Shintong planning," a flagship initiative of Mayor Oh Se-hoon, previously cut the average maintenance project timeline from 18.5 years to 13 years, a reduction of 5.5 years. This time, the city plans to expand the reduction to 6.5 years through permitting improvements and regulatory innovation, finishing maintenance projects in 12 years. The measures will proceed in three directions: ▲ streamlining procedures ▲ speeding up consultation and review ▲ promoting relocation.
The market gave high marks to the streamlining of permitting procedures, such as skipping the draft meeting for environmental impact assessments. In practice, disagreements between associations and the Seoul city government early in the environmental impact assessment stage have often delayed maintenance projects. At Jamsil District 5, for example, the project faced difficulties at the environmental impact assessment stage over public pedestrian paths and a sky community just before the project implementation approval.
A head of an association at a reconstruction complex in Seoul's Gangnam area said, "It seems they identified the detailed permitting issues on the ground that can delay projects. It looks like it will be effective."
The assessment was also that assigning permitting authority among the city, public corporations, and district governments would be effective. Seoul decided to have the "feasibility review of the management and disposal plan," previously conducted only by the Korea Real Estate Board (REB), also carried out by SH Corporation starting in the first half of next year. The city also said it would revise the "urban maintenance ordinance" to delegate authority over minor changes—such as maintenance area size and the scale of maintenance infrastructure—to district governments.
Jo Young-gwang, a researcher at Daewoo E&C, said, "Transferring the authority for the 'management and disposal plan,' the climax of urban maintenance projects, to SH Corporation and delegating authority over minor changes to local governments can increase the perceived speed of supply."
Nam Hyuk-woo, a real estate researcher at Woori Bank's WM Sales Strategy Department, said, "It is expected to have positive policy effects in that it supports fast-paced, privately led maintenance projects," adding, "The administrative procedure support measures announced by Seoul this time can practically raise the speed of maintenance projects and are likely to be effective."
However, some say concentrating supply volume around the Han River belt could, in the long term, stabilize home prices by expanding supply, but in the short term could fuel the recent upward trend. This is because apartment prices across Seoul are rising as prices jump in areas of the Han River belt excluding the three Gangnam districts and Yongsan District, which are bound by the land transaction permit system. According to the Korea Real Estate Board (REB), in the fourth week of this month (as of the 25th), the weekly apartment sale price change rate in Seoul was 0.19%, up 0.07 percentage points (p) from the previous week (0.12%). The increase in Seoul apartment prices has widened from 0.08% to 0.09%, 0.12%, and 0.19%. However, due to the land transaction permit system and the 600 million won cap on mortgage loans, the impact is expected to be limited to certain areas.
Researcher Jo Young-gwang said, "Rather than in high-priced areas like the three Gangnam districts, demand may appear in relatively less expensive parts of the Han River belt such as Jamsil, Noryangjin, and Cheonho," adding, "It will factor in the prospect that financial regulations will tighten going forward and that these areas are not yet bound by the land permit system."
There are also concerns because Mayor Oh's private supply plan was announced less than a month after the government's Sept. 7 supply plan. The focus on drawing a contrast with the government's emphasis on publicly led supply could hinder policy alignment with the central government. The government said on the 7th it would break ground on 270,000 homes annually in the Seoul metropolitan area and 1.35 million homes by 2030.
Park Hap-soo, an adjunct professor at Konkuk University's Graduate School of Real Estate Studies, said, "Of the 270,000 homes per year announced by the government, it's unclear how many are in Seoul and, among them, how much will be supplied through this Seoul city plan, so the connection is weak," adding, "With target years of 2030 and 2031 differing, it is difficult for consumers to accurately forecast supply volumes."