Eunma's 3,100 tenants face displacement as Gangnam reconstruction accelerates

A view inside the Eunma apartment complex in Daechi-dong, Gangnam-gu. [Herald Business DB]

As the government pushes ahead with a tax overhaul that would raise the comprehensive real estate tax burden on ultra-high-priced homes, reconstruction projects across Gangnam are accelerating — and a mass displacement of residents is taking shape. With Apgujeong-area associations already moving to demolish buildings before the tax assessment date, the Eunma apartment complex in Daechi-dong has now signaled a relocation in the first half of next year, raising the prospect of thousands of Gangnam households moving at once.

The Eunma Apartment Reconstruction and Improvement Project Association recently launched a survey of its tenants to gauge their preferred relocation timing and destination, according to the redevelopment industry. The association is targeting the first half of 2027 to begin the move-out process.

Analysts warn that complexes like Eunma, where tenants make up a large share of residents, could send ripple effects well beyond the surrounding jeonse and monthly-rent market — potentially reaching other parts of Seoul. Many landlords rent in Gangnam to access schools and hagwon for their children while owning homes elsewhere. If those landlords return to their own properties to reduce their tax burden under the new rules, their current tenants would also be forced to find new housing, triggering a chain reaction of relocations.

Of Eunma's 4,424 units, roughly 3,100 — about 70 percent — are estimated to be occupied by tenants rather than owners. Industry insiders say a significant number of those households own homes in other districts but rent at Eunma specifically to take advantage of the Daechi-dong hagwon belt.

If the government's tax reform takes effect, that living arrangement could change. The proposal would expand comprehensive real estate tax benefits for owner-occupiers of a single home while reducing deductions for single-home owners who do not live in their own property.

Should an Eunma landlord move back into their own home to cut their tax bill, the tenant currently living there would need to find new housing once the lease expires. That means the displacement of Eunma's roughly 3,100 households may not simply translate into higher rental demand in nearby Daechi, Dogok and Gaepo — it could generate additional relocation demand across Seoul.

Apartment buildings in Apgujeong-dong, Gangnam-gu, as seen from Dalmaji Park in Seongdong-gu, Seoul. [Herald Business DB]

In Apgujeong, it is not tenants but reconstruction association members themselves who are rushing to relocate early. With the government set to raise the comprehensive real estate tax on high-priced homes, several associations are accelerating their timelines to complete relocation and demolition before June 1, 2028.

Property holding taxes are assessed annually as of June 1. If a building has been demolished and the housing unit no longer exists on that date, the asset converts to land or an association membership right — removing it from the scope of the residential comprehensive real estate tax.

The Apgujeong Zone 4 association recently sent members a notice explicitly citing the government's comprehensive real estate tax overhaul as the reason for compressing its schedule. The association said it plans to obtain management and disposal authorization by the end of 2027 and complete relocation and demolition between January and May 2028. Calls to accelerate toward a first-half 2028 demolition are also growing louder in other Apgujeong reconstruction zones.

To prioritize the compressed timeline, the association decided to defer some disputed terms in its construction contract with Samsung C&T to a special addendum. The plan is to sign the initial contract Aug. 31, obtain management and disposal authorization in December 2027, and finish relocation and demolition by May 2028.

The concern is that relocation schedules for several large Gangnam complexes are converging on the same window. According to the Seoul Metropolitan Government, 83,630 households across Seoul are scheduled to relocate for redevelopment or reconstruction projects from this year through 2028 — with 45,256 of those slated for 2028 alone. Beyond Eunma and Apgujeong, large-scale projects such as the Jamsil Jugong 5 complex are also set to begin relocation procedures.

Experts said the tax overhaul is acting as a catalyst that could compress relocation demand into a shorter period than previously anticipated.

Ham Young-jin, head of Woori Bank's Real Estate Research Lab, said that if redevelopment relocations pile up at once, local governments may step in to stagger the timing — which could itself spark a race among project sites to begin moving out first. He added that while this year's large-scale move-ins in the Seocho and Banpo areas have helped temper price gains, a full-scale Gangnam relocation wave could funnel replacement housing demand into nearby areas such as Banpo, driving jeonse prices sharply higher.

quq@heraldcorp.com