Presale prices at rebuilding and redevelopment sites in Seoul have nearly doubled over the past five years, while the share of units offered to the general public through the subscription market has fallen to 22% from 30%. Analysts say easing floor area ratio rules for private redevelopment projects would increase the number of units available to general buyers and expand overall housing supply.
Data submitted by the Korea Housing & Urban Guarantee Corporation (HUG) to the office of Rep. Jang Jong-tae of the Democratic Party of Korea, a member of the National Assembly's Land, Infrastructure and Transport Committee, showed that the average planned presale price at 62 Seoul redevelopment sites that received association project cost loan guarantees between 2021 and August this year rose 1.7 times to 52.9 million won per 3.3 square meters this year from 31.3 million won in 2021. The findings were released on the 16th.
Excluding the three affluent Gangnam-area districts of Gangnam, Seocho and Songpa, the average planned presale price still climbed 1.8 times to 42.5 million won from 25.5 million won. One site in Seocho District posted a planned presale price of 101 million won per 3.3 square meters last November, and this year sites in Seocho and Dongjak districts submitted figures of 95 million won and 77 million won, respectively. These are the planned presale prices that associations submitted when applying for HUG guarantees, and actual prices are expected to rise further once construction and financing costs are factored in. An industry official said demand for premium designs in the rebuilding market remains steady, leaving construction costs with nowhere to go but up. The official added that new apartment prices are also being pushed higher by reconstruction association members seeking to reduce the additional contributions they owe because of rising construction costs.
Units offered to general buyers from redevelopment projects totaled 2,401 out of 8,129 units in 2021, or 29.5%, but came to just 4,361 out of 19,962 units this year, or 21.8%. The share fell for a third consecutive year, from 37.8% in 2023 to 31.9% in 2024 and 24% in 2025.
Four sites offered no units at all to general buyers. One site in Gangdong District allocated 1,164 units to association members and only 60 to general buyers, while a site in Seocho District set aside 386 units for members and just 10 for the general public. Association members want to increase general sales to improve project returns and sales revenue, but they are constrained by floor area ratio limits and requirements to supply rental housing. Kim Duk-rye, head of the housing research division at the Korea Housing Institute, said general sales are declining because of floor area ratio restrictions and that raising the allowable ratio is necessary to increase them.
Jang said presale prices are rising rapidly while the share of general sales is falling, and that it is worth examining whether expanded supply through redevelopment actually leads to housing stability for people who do not own a home and are buying one to live in. He added that redevelopment is a necessary tool for supplying housing in urban centers, but that managing the process so that gaps in housing access do not widen further is also an important duty of local governments. Not only total supply volume but also the number of units offered to general buyers and whether presale prices are affordable for owner-occupier buyers must be reviewed together, he stressed.
