Eunma reconstruction plan approved

The Eunma Apartment Complex in Daechi-dong, Gangnam, southern Seoul, shown in this March 3 photo, is among the oldest and most expensive apartments in Korea. A plan to reconstruct the complex was approved yesterday. [NEWSIS]

The Eunma Apartment Complex, an emblem of Korea’s expensive residences, received long-awaited government approval yesterday to be reconstructed, a move that could trigger a hike in the prices of apartments across the country.

The apartment complex at the heart of the expensive Gangnam region in southern Seoul is one of the oldest in Korea.

The Gangnam District Office said it gave approval for the 31-year-old apartment complex, located in Daechi-dong, to be rebuilt.

That came after three failed requests for approval by complex residents.

“With a thorough study commissioned by our office, we reached a final conclusion that the Eunma Apartment [Complex] needs reconstruction,” said the office.

The office said the piping and the steel frame of the Eunma apartments are aging badly.

The shortage of parking spaces and vulnerability to an earthquake were other justifications for the reconstruction, the office said.

The residents of the apartment complex, which comprises 4,424 units in 28 buildings, have sought approval for reconstruction for seven years.

Reconstructing old apartments is partly to improve the safety and amenities of the complex, but it is also done to raise the price of the apartments. Apartments are a major property investment in Korea.

The residents of Eunma, meaning “silver horse,” formed a committee to push for the reconstruction project in the early 2000s.

Analysts say that government concern over its impact on raising the general price levels of apartments across the country led to rejections in 2002, 2003 and 2004.

Market watchers say the approval for reconstruction of Eunma could lead to government approval to reconstruct other apartments.

The Eunma apartments, currently priced on average at more than 1 billion won ($876,420) per unit, are among the most expensive in Korea, and have served as a benchmark for pricing apartments across the country.

The Gangnam District Office said the approval after past refusals stems from the age of the complex.

“The regulation regarding the reconstruction has also eased since 2008,” said Mun Seong-jae, an official of the office.

According to the Gangnam District Office, it will take two or three years for the apartments to be demolished, and another two to three years for rebuilding.

“After working for so long to make the reconstruction happen, everybody [on the committee] is very satisfied with the decision,” said a spokeswoman for the committee. “We are now talking with the contractors about a detailed rebuilding plan.”

By Moon Gwang-lip [joe@joongang.co.kr]