The government has decided to supply 60,000 dwellings in the Seoul metropolitan area. The key appears to be "execution," or delivering the dwellings as planned. Under the Moon Jae-in administration, there was also a plan to supply 34,000 dwellings by using idle sites in the urban core, but in most places the projects did not proceed properly. As this plan again includes sites where projects stalled at the time, such as Taereung Country Club in Nowon District, Seoul, and Myeonmok Administrative Complex Town in Jungnang District, the market sees coordination with local governments and residents as the key to the government's housing supply plan.
On the 29th, the Ministry of Land, Infrastructure and Transport said through its plan to expand and expedite the supply of urban dwellings that it would supply 60,000 dwellings in the metropolitan area, including Yongsan in Seoul and Gwacheon in Gyeonggi. Supply within Seoul accounts for 32,000 dwellings, or 53.3% of the total. Next are Gyeonggi with 28,000 dwellings (46.5%) and Incheon with 136 dwellings (0.2%).
The market gave a positive assessment of the decision to supply more than 30,000 dwellings to Seoul, which has long suffered from a chronic shortage of dwellings. However, there are notes that execution and speed are crucial for the urban dwelling supply planned by the Ministry of Land, Infrastructure and Transport (MOLIT) to lead to market stabilization. That is because using idle sites in the urban core to supply dwellings is not a new policy.
In 2020, the Moon administration announced that it would make large-scale supplies of dwellings by using state-owned and public land in Seoul and adjacent areas, selecting 18 idle sites with capacity for 34,000 dwellings. Among the idle sites selected then, all but one—the unsold parcel in Magok—have seen development drift for an extended period due to resident opposition or objections from some ministries.
Taereung Country Club included in this plan was also a candidate idle site under the Moon administration. The government, which had pursued supplying dwellings for 10,000 households, reduced the supply to 6,800 households, but discussions on the development stalled due to resident opposition. Myeonmok Administrative Complex Town in Jungnang District was also a candidate idle site where supply of 1,000 dwellings was being pursued at the time. In this plan, the Ministry of Land, Infrastructure and Transport (MOLIT) included a plan to supply 6,800 dwellings at Taereung Country Club and 712 dwellings at Myeonmok Administrative Complex Town.
Lee Chang-mu, a Hanyang University professor, said, "I think the supply within the urban core is meaningful for major sites such as Yongsan and Gwacheon," but added, "However, using idle sites is basically an issue premised on agreement with local governments and residents. It is not explicitly clear what agreements exist at present, so I am not sure whether speed can be achieved."
Ham Young-jin, head of the real estate research lab at Woori Bank, said, "This Seoul supply signal is expected to play the role of timely rain for overall supply in the metropolitan area," but noted, "The problem is time, as most of these sites have procedures to clear, such as land preparation, permits and approvals, coordination of interests, and securing financing."
Ham said, "Even after the announcement, it typically takes more than three to four years between groundbreaking and actual move-in (completion), so a task remains to offset concerns about the effectiveness of supply given this 'time lag' in the market," adding, "In the short term, supply expectations can suppress prices, but a speed race in which visible groundbreaking and sales quickly follow will be key to the policy's effectiveness."
MOLIT's position on such concerns is that "this time will be different." The idea is that if the factors behind the failure of the previous idle-site dwelling supply plan are reviewed and the preferences of local governments and residents are reflected, the projects can pick up speed.
Kim Yun-duk, Minister of MOLIT, said, "One of the biggest challenges in supplying apartments in the metropolitan area is opposition from residents and local governments. Looking at the reasons, there is an aversion to building only dwellings," adding, "I think it would be persuasive to develop by combining elements that can bring in self-sustaining functions, high-tech industries, or jobs."
In particular, the Minister said of Taereung Country Club, "Previously, progress stalled partly due to insufficient preparation for the World Heritage impact assessment and disagreements with related ministries at the time," adding, "This time, we plan to obtain the World Heritage impact assessment as quickly as possible, and if we prepare properly in step with that, we judge the project to be sufficiently feasible."
Another MOLIT official also said, "This time, coordination has gone well, and we have aligned with the Korea Heritage Service to obtain a World Heritage impact assessment after hearing its views and to proceed by reflecting those views. We are also coordinating with the local government," adding, "In that process, we plan to actively support facilities desired by residents, such as solutions to traffic issues and parks, to ensure the push proceeds without undue strain."