Both public and private sales prices rise
Continued regulation amid expectations for the speed of reconstruction projects
Still cheaper than the market price…
[서울=뉴스핌] Reporter Park Woo-jin = Reconstruction and public sales prices are soaring despite the restrictions on the pre-sale price limit for private residential land. The main culprit is the increase in land prices due to the government’s pursuit of real estate official prices.
The government expected that the pre-sale price would be lower if the pre-sale price limit was applied rather than the high pre-sale price review by the Housing and Urban Guarantee Corporation (HUG). However, as the recently announced public announcement was pursuing realization, it deviated from expectations. There are many observations that an increase in pre-sale prices in the future is inevitable, as the cost of housing land occupies the largest part in the calculation of pre-sale prices.
◆ Private sale price rises even in the sale price limit… Reconstruction complex is half anticipation and half concern
According to the real estate industry on the 12th, cases of high pre-sale prices are coming out one after another even with the application of the pre-sale price limit in private sale complexes in Seoul and the metropolitan area.
On the 8th, Raemian One Bailey, who rebuilt Sinbanpo 3rd and Gyeongnam apartments, recorded 56.68 million won per 3.3m2, the highest selling price ever. The previous highest pre-sale price was 48.91 million won per 3.3㎡ of Leel Sinbanpo Central, which was sold in November 2019. This complex was not subject to the pre-sale price limit. Raemian One Bailey recorded a high pre-sale price of nearly 8 million won even after the pre-sale price limit was applied.
The Ministry of Land, Infrastructure and Transport explained that the complex was designated as a special construction zone at the top of the pre-sale price, resulting in an increase in construction and additional costs.
An official from the Ministry of Land, Transport and Maritime Affairs said, “The pre-sale price was set higher by reflecting the extra cost according to the designation of the special construction zone rather than the increase in the land price.”
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| [서울=뉴스핌] Reporter Choi Sang-soo = The demolition work of the Dunchon Jugong apartment in Gangdong-gu, Seoul is in progress. 2019.08.14 [email protected] |
In the redevelopment complex, expectations for future pre-sale prices and project progress are growing with this result. In the meantime, some reconstruction complexes have been in conflict over the price of sales. As the high pre-sale price was set, it is now possible to expect a pre-sale price close to the will of the members in the future.
A member of the reconstruction apartment in Jamsil-Jinju said, “There are still procedures left, so it is not a stage to discuss the sale price.”
In particular, in the Dunchon Jugong Reconstruction Complex, the largest reconstruction complex since Dangun, conflict over the calculation of the sale price was intensifying. The project has suffered from a large difference in the pre-sale guarantee price suggested by the member and the Housing and Urban Guarantee Corporation (HUG). HUG offered 29.78 million won per 3.3 square meter, and members of the union offered 35 million won. In the process, a conflict arose inside the members, leading to a lawsuit, and even dismissing the president.
On the other hand, there are some opinions that it will not affect the project progress as the government’s reconstruction regulations continue. Although the government is preparing various measures to prepare housing supply measures, it maintains the reconstruction regulation, which is the main housing supply plan. The government’s stance is expected to continue in the future.
Professor Shim Gyo-eon of Konkuk University’s Department of Real Estate said, “The reconstruction speed may be a little faster,” he said. “There are still restrictions on reconstruction, and there are possibilities for additional regulations, so it will not lead to big changes.”
◆ Rapid rise in pre-sale prices for public housing without exception
The rise of pre-sale prices was no exception in pre-sale complexes of public housing. Unlike private residential lands, public housing lands have been subject to the pre-sale price limit, but the pre-sale price has continued to rise.
In June of last year,’Godukgangil 8 Complex’ and’Godeokgangil 14 Complex’ supplied by the Seoul Housing and Urban Corporation (SH Corporation) in Gangil District, Gangdong-gu, Seoul, were sold for an average of 18 to 19 million won per 3.3㎡.
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| [서울=뉴스핌] Reporter Kim Seong-soo = 2020.12.30 [email protected] |
‘Hillstate Leashville Gangil’, which was supplied to Gangil District, Gangdong-gu, Seoul last month, recorded a pre-sale price of 22.3 million won per 3.3㎡. The pre-sale price was expected in the early 20 million won range, but it recorded a higher pre-sale price. Although the price was added in that it was a private sale apartment, it was a sale price that exceeded market expectations.
‘Pangyo Valley Xi’ in Seongnam, which has recently entered into subscription, was sold for 2356 million to 2437 million won per 3.3 square meter. It was a complex when entering a public housing district, but it recorded higher sales prices than expected. The price is higher than that of’Pangyo First Hill Prugio’, a nearby complex sold in December 2018, recording 20.3 million won per 3.3 square meter. This complex did not have a pre-sale price limit applied to private housing districts.
◆ Rising house prices are driving up public and private pre-sale prices
In the market, the rise in pre-sale prices regardless of public and private residential lands despite the pre-sale price limit system is attributed to the rise in land prices due to higher house prices.
The sale price is determined by adding the additional cost to the land cost and construction cost. The cost of housing land is determined by reflecting the evaluation of the land appraisal, and the construction cost is determined based on the standard construction cost determined by the government.
The proportion of housing land costs is high in pre-sale prices. The standard construction cost, which is the basis for calculating the construction cost, is measured every year in consideration of the inflation rate, and the additional cost is also reflected only when special criteria such as donation payment and specialized design are met.
In the calculation of the pre-sale price of Raemian One Bailey, the housing site appraisal amount was 42.4 million won, the basic building cost was 7.98 million won, and the additional cost was 6.66 million won, accounting for the largest portion of the housing site appraisal amount. Even if the sale price limit is applied, if the house price rises, the sale price is inevitably increased.
Young-jin Ham, head of Jikbang Big Data Lab, said, “The proportion of housing site appraisals accounts for more than 60% of the pre-sale prices. The rise in pre-sale prices even under the pre-sale price ceiling is due to the continued rise in house prices.”
◆ Lotto subscription continues even when high sales are available
Even with the pre-sale price limit, cases of pre-sale prices higher than market expectations are expected to emerge. In a situation where the land price continues to rise, the amount of land appraisal should naturally increase. Here, the publicly announced land price of the standard land for 2021 next month will be determined and disclosed. The rise in pre-sale prices is expected to continue as land prices are expected to reflect the recent rise in house prices.
Professor Kwon Dae-jung of the Department of Real Estate at Myongji University said, “As the increase in land prices affects the calculation of pre-sale prices, there are likely to come out of pre-sale complexes that exceed market expectations.”
Even if high pre-sale cases come out, pre-sale demand for lottery subscriptions is expected to continue. Despite the pre-sale price exceeding market expectations, it is still cheap compared to the market price. There are restrictions such as restrictions on resale and the period of obligatory residence, but this is because you can enjoy market profits.
Seo Jin-hyung, president of the Korean Real Estate Association (Professor of Kyungin Women’s University), said, “Even if the sale price rises, the market price and the difference are still big.”