For the first time in 14 years, land-leasehold multifamily dwellings are being offered for sale in Seoul. In land-leasehold multifamily dwellings, the land is owned by the public sector and only the building is sold, lowering the initial sale price; they are called "half-price apartments." This method of supplying dwellings has been discussed since the mid-2000s, and during the Lee Myung-bak administration, some land within Bogeumjari districts was supplied as land-leasehold dwellings. The land-leasehold multifamily dwellings being sold this time will be offered at 400 million won for the standard 84-square-meter exclusive area and in the high-200 million won range for the 59-square-meter exclusive area. However, tenants must pay monthly land rent.
According to the Seoul Housing and Urban Development Corporation (SH) on the 12th, SH will begin accepting applications for land-leasehold sale dwellings in Magok District Complex 17 starting that day. Of the complex being built at 747-1 Magok-dong, Gangseo District, with up to 16 floors across 10 buildings and a total of 577 households, 381 households will be supplied this time. Located between Songjeong Station and Magok Station on Seoul Subway Line No. 5, the area is a residential neighborhood with apartment complexes such as Magok M Valley and Magok Hillstate Master nearby.
By area, 355 households are 59 square meters of exclusive area, and 26 households are 84 square meters of exclusive area. The sale prices by exclusive area are a minimum of 296.65 million won for 59 square meters and 409.52 million won for 84 square meters.
In addition to the sale price, monthly land rent must be paid. The land rent is 660,000 won for 59 square meters and 940,000 won for 84 square meters. However, successful buyers who find the land rent burdensome may, by agreement with SH, lower the rent and raise the sale price. An SH official said, "Through agreement, the rent can be reduced by up to 60%."
As of Feb. 27, the date of the tenant recruitment announcement, members of households without dwellings who live in the Seoul metropolitan area (Seoul, Gyeonggi, Incheon) and who are subscribers to the National Housing Subscription Savings or the Housing Subscription Savings may apply. Of the total, 175 households will go to presubscription winners, and the rest will be supplied through special and general sales. If selected, residents must live there for five years, and after 10 years they may sell the dwellings to a third party. Before 10 years, the dwellings can be sold only to SH.
Near the supplied complex are Magok M Valley and Magok Hillstate Master. In Magok M Valley Complex 10, an 84.89-square-meter exclusive unit sold for 1.55 billion won on Dec. 13 last year. In Magok Complex 13 Hillstate Master, an 84.98-square-meter exclusive unit changed hands for 1.695 billion won on Feb. 10.
Land-leasehold dwellings were first proposed in 2005 during the Roh Moo-hyun administration by the Housing and Urban Research Institute, an affiliated research body of the Korea Land & Housing Corporation (LH), then called the Korea National Housing Corporation. In September 2007, three 74-square-meter exclusive units were first supplied at "Gunpo Bugok Humansia" in Gunpo, Gyeonggi, with move-ins in 2010.
In November 2010, during the Lee Myung-bak administration, the Special Measures Act to Promote the Supply of Land-Leasehold Sale Dwellings (Land-Leasehold Sale Dwellings Act) took effect. After that, 358 land-leasehold apartment households (Hoban Summit Seocho Parkview) were sold in the Seocho Bogeumjari District in Umyeon-dong, Seocho District, in 2011. In November 2012, 402 households at "LH Gangnam Breeze Hill" were sold in Jagok-dong, Gangnam District. Since Gangnam Breeze Hill, there have been no cases supplied as land-leasehold dwellings for 14 years. SH accepted presubscriptions for 1,623 households across three areas in Godeok Gangil and Magok from 2022 to 2023, and the first to receive a sales notice among them is Magok District Complex 17.
Sim Hyeong-seok, senior committee member at Law Firm Joyul (head of the Udaebbang Research Institute), said, "The average sale price of apartments in Seoul has risen to 1.5 billion won, and since these are supplied at prices far below market levels, they have many advantages in terms of price," adding, "After 10 years, you can sell only the building excluding the land, so it is not a bad choice in terms of asset value."
Seo Jin-hyung, a professor in the Department of Real Estate and Legal Affairs at Kwangwoon University, also said, "In the past, many people wanted to have full ownership, but with home prices rising sharply recently, market interest in dwellings coming out at such low prices is growing."