"Even Reconstruction Doesn't Work" No Purchase Inquiries Despite Passing Safety Inspection

[Asia Economy Reporter Cha Wanyong] With the easing of safety inspection regulations, which was called the last obstacle to reconstruction projects (on the 5th), complexes passing the safety inspection are lining up. However, the frozen real estate market's buying sentiment is hardly responding to the good news about safety inspections.

According to the urban maintenance and real estate industry on the 15th, seven complexes including Mokdong New Town 3, 5, 7, 10, 12, and 14 complexes in Yangcheon-gu, Seoul, and Sinwol Siyeong passed the safety inspection. Also, in Gyeonggi Province, Cheolsan Jugong 12 and 13 complexes in Gwangmyeong City crossed the threshold.

Apartment buildings in the Mokdong area of Yangcheon-gu, Seoul. [Image source=Yonhap News]

These complexes had previously received a 'conditional reconstruction' judgment in the first safety inspection, but with the new safety inspection standards applied from the 5th of this month, the status changed to 'reconstruction.'

In complexes that passed the safety inspection, homeowners are showing movements to withdraw listings or raise prices.

The representative of C Real Estate Agency in Mokdong said, “After passing the safety inspection, homeowners have been asking a lot about price outlooks,” adding, “For now, homeowners are withdrawing listings and raising asking prices even if the houses do not sell.”

A representative of D Real Estate Agency near the Cheolsan Jugong complex also said, “Homeowners have withdrawn the urgent sale listings they had put out,” and “There are only asking price listings, and urgent sales are almost none.”

However, despite the news of passing the safety inspection, demand from buyers who actually want to purchase homes remains quiet. Compared to 2021 when the real estate market in the area was bustling with news of passing safety inspections, there is a clear temperature difference.

The representative of C Real Estate Agency said, “Since the government's announcement of easing safety inspection regulations, inquiries from buyers have continued,” but added, “However, buyers say they will consider it if prices drop further, so in fact, there are almost no transactions.”

In the market, there are also expectations that the gap between the desired prices of buyers and sellers will widen further, deepening the transaction freeze. This is because the atmosphere is strong that house prices will fall further if the economic recession intensifies.

Also, the complexes that have currently passed the safety inspection are places that already had redevelopment issues, and since the projects are still in the early stages, it takes a long time until development, which also limits the immediate movement of the buying market.

In fact, after passing the safety inspection, it takes from a few years to over 10 years to proceed with full-scale development after obtaining residents' consent.

The representative of C Real Estate Agency said, “For now, there is a significant price gap between sellers and buyers on site,” and “Considering the recent housing market situation, it will be difficult to expect more than urgent sale transactions for the time being.”

This content was produced with the assistance of AI translation services.