Gwangmyeong Haan Jugong Rebuilding Drives Prices Up 200-300 Million Won

* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an AI-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six customized news items by reader type.

1. "Sellers Name Their Price as Listings Vanish"… Prices Jump 200-300 Million Won in a Year

Key summary: The Haan Jugong complexes 1 through 12 in Gwangmyeong, Gyeonggi Province, have all moved toward rebuilding at once, cutting available listings to just two or three per complex. Unit 12's 76-square-meter apartments set a record high of 1.12 billion won last month, while Unit 3's 49-square-meter apartments soared from the 500 million won range last October to 730 million won in June. The prospect of an upzoning from Type 2 to Type 3 general residential zoning and of securing a floor area ratio of up to 330% is seen as easing the projects' financial viability. With members' contribution charges and relocation plans cited as the variables that will determine how fast the projects move, analysts say investors should closely check each complex's project stage and estimated contribution levels.

2. Supply Effect of Up to 30,000 Units… "A Development Direction to Raise the City's Competitiveness Must Be Presented"

Key summary: The developable land across the Yongsan area — including the Yongsan International Business District, the redevelopment belt west of Seoul Station, and returned U.S. military sites — totals 3.93 million square meters, 1.36 times the size of Yeouido. Arithmetically, there is potential for the supply of up to nearly 40,000 units, but a revision of the special act on developing Yongsan Park must come first, and Seoul Mayor Oh Se-hoon is strongly objecting, saying he "cannot agree to even one centimeter." The consensus is that it is difficult to pin down an actual construction start date, as the process must go through negotiations to return the U.S. military land and soil-contamination cleanup. The assessment is that if large-scale supply becomes visible, the supply-and-demand shock to the nearby property market should be closely monitored from a medium- to long-term perspective.

3. 47% Also Back Keeping the Long-Term Holding Deduction… Will Parliament's Additional Tax Overhaul Gain Momentum?

Key summary: In a survey the government conducted before announcing its tax reform plan, 46.8% favored keeping the long-term holding special deduction, not far behind the 53.2% who supported switching. On the threshold for ultra-high-priced homes, responses of "3 billion won" and "2 billion won" together accounted for a majority at 51.2%, but the government's plan did not reflect a separate threshold. With voices within the ruling bloc also expressing concern about the effect on the general election, analysts read that the 2029 schedule to switch to a residency-based deduction and the plan to change the value threshold for the comprehensive real estate tax could be revised during parliamentary discussions. The need to reconsider tax-saving strategies is growing, especially among multiple-home owners and single-home owners who do not live in their property.

4. KB and Shinhan Hold 11 Trillion Won in Mortgages at 80%-Plus LTV

Key summary: The combined mortgages at loan-to-value (LTV) ratios of 80% or more held by KB Kookmin Bank and Shinhan Bank amounted to about 10.9 trillion won. Starting next year, the risk weight (RW) on high-LTV mortgages is set to rise from the current double to two to four times, making banks' handling of high-LTV loans even more difficult. The average spread on newly extended mortgages in June was 3.27%, the highest since July 2019. As a result, investors relying on high LTV are at a juncture where they need to reexamine their loan structures and proactively revise their financing plans.

5. Domestic REIT Market Reaches 127 Trillion Won… "Fivefold Growth Over 10 Years"

Key summary: As of the end of July, the domestic REIT market comprised 470 vehicles with total assets of 127.3 trillion won, roughly a fivefold increase from 10 years earlier. As of the end of last year, the average dividend yield of all REITs excluding policy REITs reached 11.8%, and by asset type, housing accounted for the largest share at 44.4%, followed by offices at 34.0%. After JR Global REIT filed for corporate rehabilitation this April, listed REITs' market capitalization temporarily plunged 27% but is gradually recovering. Meanwhile, REITs are required to pay out 90% or more of their distributable profit, which is seen as making them an alternative for investors seeking more stable cash flows than direct investment.

6. Sangdo-dong 214 Area in Dongjak-gu to Be Transformed Into 1,840-Unit Eco-Friendly Complex

Key summary: The Seoul city government has finalized the fast-track redevelopment plan for the area around 214 Sangdo-dong in Dongjak-gu. An aging residential area where semi-basement units made up 74% of homes is set to be reborn as an eco-friendly residential complex of up to 29 stories and about 1,840 units. The zoning will be raised from the existing Type 1 and Type 2 general residential zones to a Type 2 general residential zone, and a pedestrian network linked to Sangdo Neighborhood Park will be built, along with amenities such as a care center and a senior club. Traffic conditions are also expected to improve, with Yangnyeong-ro 26-na-gil converting from one-way to two-way traffic.