As reconstruction options expand in first-generation new towns, the remodeling market is entering a phase of 'sorting the wheat from the chaff.' Some complexes in Pyeongchon and Ilsan are considering transitioning to reconstruction due to high contribution fees and limited general sale volumes, while areas in Seoul and the metropolitan region that have made significant progress or where reconstruction is less beneficial are continuing with remodeling.
According to the maintenance industry on August 12, conflicts surrounding remodeling projects are intensifying at the Daelim Apartments in Pyeongchon, Anyang. A committee opposing the project, formed by some members, recently announced a meeting to dismiss the association's executives. It is reported that they are seeking a change in leadership due to a lack of progress in dissolving the remodeling association and transitioning to reconstruction.
In Ilsan, the Muncheon Village 16 complex is also pursuing remodeling, but some residents are voicing demands for a transition to reconstruction. High contribution fees are seen as a barrier to advancing the project, leading to calls for reconstruction.
The primary reason for the growing conflict over remodeling in first-generation new towns is the comparative profitability with reconstruction. While remodeling has advantages in terms of project duration and procedures by utilizing existing structures, it is limited to increasing the number of units by only 15% of the existing total, which restricts the volume available for general sale.
Rising construction costs are also a burden. The nature of remodeling, which involves maintaining existing buildings while adding new structures, can lead to significant expenses for structural reinforcement and equipment replacement. As construction costs rise, the contribution fees for members also increase.
Although the government has established special measures to stimulate remodeling, there are limitations. If remodeling is pursued in designated special maintenance zones for aging planned cities, the limit on the increase in the number of units can be relaxed to a maximum of 140% of the existing housing law cap. This means the increase limit can rise from 15% to a maximum of 21% compared to the existing number of units.
However, in complexes with limited existing space, even if the number of units is increased, the impact on profitability through general sales remains limited. Ultimately, the advantages and disadvantages of reconstruction versus remodeling will depend on existing floor area ratios, the potential volume for general sales, and the stage of project progress.
Nonetheless, the overall remodeling market is not in decline. In areas where the benefits of transitioning to reconstruction are minimal or where projects are already well underway, remodeling continues. In Yongin's Suji District, projects are being pursued by Shinseong, Sinan, Ssangyong, and Jinheung, while six complexes, including Suji Choiip Village, Bowon, Dongbu, Hanguk, Seongbok Station River Park, and Suji Treetree, have completed their project plan approvals.
The Garak Hanshin Remodeling Association in Songpa District, Seoul, held a meeting on September 9 to select a construction company, choosing POSCO E&C. The existing complex, which has 256 units, is set to transform into a 293-unit building with four basement levels and 20 above-ground floors.
Mid-sized construction companies are also viewing remodeling as a key area for contracts. Ssangyong Construction has completed five complexes, including Bangbae Palace and Dogok Dongshin, and is pursuing remodeling for Munjeong Hyundai and Garak Ssangyong 1st. DL Construction, Kolon Global, and Dongbu Construction are also strengthening their capabilities in related projects.
Lee Eun-hyung, a researcher at the Korea Construction Policy Institute, stated, “In the past, remodeling was used as an alternative to reconstruction regulations, but as the scale of projects has grown with expansions and the addition of underground parking, the distinct advantages over reconstruction have diminished.” He added, “In the future, there may be an increased demand for remodeling that reduces large-scale construction and enhances aging facilities.”
* This article has been translated by AI.
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