Seoul Mayor Oh Se-hoon's 310,000-Unit Housing Plan: Progress and Potential Pitfalls

Seoul Mayor Oh Se-hoon is pursuing a plan to commence construction on 310,000 housing units by 2031. Indeed, the acceleration of urban regeneration projects is palpable on the ground, with reconstruction and redevelopment zones seeing increased activity in permits and approvals, and more complexes entering stages like project execution approval and management disposition approval. Daechi Eunma and Jamsil Jugong 5 complex are reportedly nearing the final stages of project execution approval. The city is pushing numerous regeneration projects simultaneously to meet its supply targets.

Seoul has designated 85 zones (comprising 85,815 households) as 'key supply strategy projects,' including those undergoing management disposition, relocation, and demolition phases. These projects are slated for construction commencement between 2028 and 2031.

However, Seoul is experiencing a rapid shift from long-term rentals (jeonse) to monthly rentals (wolse), coupled with insufficient new apartment supply. This situation could place significant strain on the jeonse and wolse market if relocation demand from regeneration projects across the city occurs all at once. The process of regeneration involves demolishing existing homes and rebuilding, requiring numerous current residents to relocate before the 310,000 units can be supplied. If relocation demand surges concurrently across Seoul, subsequent regeneration projects will struggle to find housing for residents in a market already depleted of rental properties, placing considerable pressure on the jeonse and wolse market. This could lead to a supply shock arising from the gap between future supply and current demand generation.

In the coming years, the speed of project progression in Seoul's reconstruction and redevelopment market may become a crucial factor, beyond just profitability. Market conditions can vary between complexes within the same area based on their development pace, and the scale, speed, and timing of relocation demand, rather than the sheer volume of supply, could emerge as the key market drivers.