Prices for apartments subject to the price cap system are expected to rise. The basic construction cost, which affects the pricing of apartments under the cap, climbed 1.59% from six months ago to the 7.1 million won range per 3.3㎡ (pyeong).
The Ministry of Land, Infrastructure and Transport on the 15th issued its regular notice setting the basic construction cost under the price cap at 2,174,000 won per ㎡. That is up 1.59% from 2.14 million won per ㎡ six months earlier. Accordingly, the basic construction cost per pyeong rose from 706 million won in Mar. to 717 million won.
The basic construction cost is one of the components that make up the ceiling on the sale price of dwellings subject to the price cap system. In areas where the cap applies to public and private land, the sale price of dwellings supplied is calculated by adding land costs, land premiums, and construction premiums to the basic construction cost.
The ministry issues the basic construction cost on a regular basis on Mar. 1 and Sept. 15 each year. For this notice, the ministry updated, for the first time in five years, the model that serves as the sample for calculating the basic construction cost.
This notice applies to complexes that apply for approval to recruit occupants on or after the 15th of this month. The actual sale price is determined by local governments' price review committees after comprehensively considering the basic construction cost, land costs, and other additional costs.
The ministry said, "Through this regular notice of the basic construction cost, we reflected factors driving construction cost changes," and noted, "We plan to continue efforts to ensure sufficient supply of quality dwellings."