The fire erupted at 6:27 a.m. (0927 GMT) in Guryong Village in southern Seoul, which is home to more than 600 households.
About 40 homes have been destroyed so far, fire officials said, adding they have called out 140 firefighters to contain the fire.
President Yoon Suk Yeol called for all-out efforts to minimise the damage and mobilise all available firefighters and equipment, his spokeswoman Kim Eun-hye said.
Interior Minister Lee Sang-min also instructed officials to prevent any secondary damage and protect other residents in the nearby areas, the ministry said.
(Reporting by Hyonhee Shin; Editing by Christian Schmollinger)
