The basic construction cost, which serves as the standard for calculating sales prices at complexes subject to the price cap on presales, rose more than 14% over three years. As a result, sales prices at price‑capped complexes are also rising quickly.
The basic construction cost is a key item that makes up the sales price of price‑capped dwellings. As of September, it was 2,174,000 won per square meter. That is up 34,000 won from March this year (2,140,000 won), six months earlier, and it has been rising continuously since March 2022 (1,857,000 won).
Compared with September 2022, three years ago (1,904,000 won), the basic construction cost rose about 14% (270,000 won). Converted to 3.3 square meters, that is about 890,000 won. By simple calculation, construction costs for one 84-square-meter exclusive unit have increased by more than 30 million won in three years. When including areas such as common spaces, the rise in construction costs can only be larger.
As construction costs rise, sales prices at price‑capped complexes are also climbing quickly. In fact, the 84‑square‑meter exclusive units at the price‑capped complex Hills State Richeville Gangil in the Godeok‑Gangil District of Gangdong‑gu, Seoul, were sold for a maximum of about 790 million won in 2020, but the nearby Godeok‑Gangil Daeseong Verihill, which went on sale in May this year, had a maximum sales price of about 980 million won for the same size, up about 200 million won in roughly five years. That works out to about 40 million won a year.
Also, the 97‑square‑meter exclusive units at Dongtan Station Herriot, sold in 2020 in Dongtan 2 New Town, were supplied in the upper 560 million won range at the time, but the same size units at Dongtan Fore Park Jayeon & Prugio, which went on sale in May this year, were priced at 670 million won, supplied at a price more than 100 million won higher in about five years.
As even the sales prices of price‑capped complexes soar, demand is concentrating on securing such complexes before prices rise further. Through September this year in Gyeonggi Province, seven of the top 10 complexes by number of first‑priority applicants were price‑capped complexes. At these seven complexes alone, 63,118 people used their subscription accounts, accounting for 72.8% of the total number of first‑priority applicants (86,655).
An industry official said, "It is true they are more price‑competitive than complexes not subject to the cap, but sales prices at price‑capped complexes are also rising quickly every year, so this is not a situation where buyers can wait comfortably," adding, "In particular, as the government is rolling out strong regulations one after another, demand is likely to concentrate on price‑capped complexes in non‑regulated areas before additional regulations are introduced."