[Edaily Reporter KIM HYUNG-HWAN ] Following Daechi-dong in Seoul, apartment reconstruction projects are gaining momentum in major school districts such as Mok-dong and Gwangnam (near Gwangnam Elementary, Middle, and High Schools in Gwangjin-gu), bringing a looming crisis in monthly rent and deposit prices in these areas. In particular, interest in living in these school districts is expected to rise even further after the National Education Commission recently announced that it would consider introducing an absolute grading system for school grades starting in 2030.

According to the urban renewal industry on the 10th, the Eunma Apartments Reconstruction Association is moving forward with the project with the goal of relocating residents during next year’s summer vacation. Last month, the association notified tenants of the relocation plan and surveyed their intended new residences. The association plans to file eviction lawsuits against some tenants to prevent delays in the project caused by delayed or refused relocations.

If the relocation of the 4,424-unit Eunma Apartments becomes a reality, it is highly likely to cause significant fluctuations in the jeonse and monthly rent markets not only in Daechi-dong but also in areas such as Gaepo, Yeoksam, and Samsung. Jeonse accounts for approximately 2,200 units at Eunma Apartments, or about half of the total. This demand is largely attributed to parents seeking to educate their children within the Gangnam school district. Given the nature of these school districts, it is difficult for residents to move far from the Daechi-dong area, so jeonse prices in that region are expected to rise.

In fact, since Eunma Apartments received project implementation approval last July, tenants have been scrambling to find new homes. As a 47-year-old existing building, Eunma’s jeonse prices are about 200 million to 300 million won cheaper than those in the surrounding area, making it difficult to find a jeonse unit at a similar price nearby. Non-apartment listings (villas and officetels) have dried up, and monthly rent prices for nearby apartments continue to rise.

Mr. A, who runs a real estate agency in Daechi-dong, explained, “The more proactive parents started looking for a place to move to as early as the first half of the year, and now there are virtually none left,” adding, “People who were living in jeonse units at Eunma are now looking for nearby banjeonse units, villas, or officetels, but prices have skyrocketed and there are almost no listings available.” In fact, according to Naver Real Estate, there have been only two listings for “3-room” or larger units in Daechi-dong.

Redevelopment is actively underway not only in Eunma but throughout Seoul’s school districts. The 14 complexes in Mok-dong, comprising a total of 26,629 households, completed the designation of their redevelopment zones for Complexes 1 through 3 last December. Currently, Mok-dong Complex 6—which is progressing the fastest—is moving forward with the project, aiming to secure project implementation approval in the second half of next year. Relocation is expected to begin as early as next year. Once relocation begins, the monthly rent and lease markets in nearby areas of Yangcheon-gu, such as Sinjeong-dong and Sinwol-dong, as well as Hwagok-dong in Gangseo-gu, are expected to experience significant fluctuations.

In the increasingly popular Gwangnam school district, reconstruction projects are also underway, starting with Gyeongdong Phases 1 and 2, followed by Samsung Phases 1 and 2, and Gwangjang Hyundai Phases 3 and 5.

Some observers predict that the Seoul Metropolitan Government may adjust the relocation schedule for these redevelopment projects out of concern for a rental market crisis. In 2015, the city delayed the approval of management and disposal plans for three complexes, including Gaepo Jugong Complex No. 3. The Dunchon Jugong Apartments, comprising approximately 6,000 households, were originally scheduled for relocation in March 2017, but the relocation date was pushed back by about two months following a recommendation from the Seoul Metropolitan Government.

Shim Hyung-seok, Senior Research Fellow at the law firm Jo-yul, explained, “In school districts, residents have no choice but to relocate to the immediate vicinity, so it is necessary to minimize disruption in the rental market by adjusting the relocation schedule.”