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🇰🇷 South Korea /Environment & Climate

Seoul's aging apartments signal reconstruction boom, but sustainability questioned

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

News Documents & data Context piece
  • Seoul faces a potential surge in apartment reconstructions as over 30% of buildings reach the 30-year age limit.
  • A shift towards taller buildings in future reconstructions raises concerns about the sustainability of the current model, which relies on increased floor area ratios for profitability.
  • This trend could exacerbate housing market instability, particularly in less affluent areas, and create a paradox of reduced rental supply due to reconstruction demands.

Seoul's housing market is grappling with the implications of a looming wave of apartment reconstructions. Over 30% of the city's apartments, totaling more than 530,000 units, have already surpassed the 30-year mark, qualifying them for reconstruction. This number is set to double by 2035, with a significant cluster of buildings reaching this age between 2028 and 2030.

The key is securing business viability.

— Source AnalysisDescribing the core principle of the 'Korean-style reconstruction' model.

The current reconstruction model, often termed 'Korean-style reconstruction,' has historically benefited owners and developers by allowing for increased floor area ratios. However, a new analysis reveals a significant shift: future reconstruction candidates are increasingly high-rise buildings. While only 15.8% of apartments currently eligible for reconstruction are over 16 stories, a staggering 81% of those set to become eligible between 2027 and 2035 are high-rise structures, averaging nearly 19 stories.

This demographic shift poses a challenge to the established reconstruction framework. Many of these newer, high-rise buildings already have high floor area ratios, limiting the potential for further increases. This makes it harder to secure sufficient profits through the sale of new units, potentially shifting the financial burden to homeowners through higher contributions. Compounding this issue are rising construction costs, which have jumped from around 5 million won per 3.3 square meters two years ago to 7-8 million won.

It's not a master key.

— Kim Yong-beomA Blue House policy official's rebuttal to the idea that reconstruction is a universal solution.

The concentration of eligible buildings is also shifting. While Gangnam and Seocho districts have many older buildings already undergoing reconstruction, areas like Songpa, Gangdong, and Gangnam will see a significant number of buildings reach the 30-year mark by 2035. Meanwhile, districts like Gwanak, Seongbuk, Geumcheon, Guro, and Seongdong will see a surge in eligible buildings. This concentration, coupled with potential overlapping relocation periods for residents, could lead to increased housing market instability and a paradox where reconstruction efforts inadvertently tighten the rental market.

Reconstruction areas are increasingly concentrated in parts of Gangnam.

— Kim Hyun-sooProfessor at Dankook University's Department of Urban Planning and Real Estate, commenting on the geographic shift of reconstruction potential.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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