HUG Likely to Reject Dunchon Jugong Reconstruction Project's Pre-sale Guarantee

HUG Sets General Sale Price Around 30 Million KRW per 3.3㎡
Big Gap Compared to Union's 35.5 Million KRW per 3.3㎡
Union Holds Emergency General Meeting to Discuss Price Reduction or Post-Sale Payment

On the 13th, demolition work for reconstruction is in full swing at Dunchon Jugong Apartment in Gangdong-gu, Seoul. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Onyu Lim] The Housing and Urban Guarantee Corporation (HUG) plans to reject the pre-sale guarantee for Dunchon Jugong Apartment, known as the "largest reconstruction since Dangun." HUG has decided not to accept the 35.5 million KRW per 3.3㎡ price proposed by Dunchon Jugong. As a result, Dunchon Jugong faces a crossroads between lowering the general sale price and opting for post-sale.

On the 16th, a HUG official stated, "We plan to notify our intention to reject the pre-sale guarantee application from Dunchon Jugong within a few days." The Dunchon Jugong union had earlier proposed a general sale price of 35.5 million KRW per 3.3㎡ to HUG. However, as in prior preliminary consultations, HUG maintained its stance that the general sale price should be set around 30 million KRW per 3.3㎡, leading to a breakdown in negotiations.

The reason the Dunchon Jugong union hurried to apply for the pre-sale guarantee without reaching an agreement with HUG is due to the pre-sale price ceiling system. If the resident recruitment announcement is not made by April 28, the project will be subject to the price ceiling system. However, there is a possibility that the deadline for the pre-sale price ceiling system exemption may be extended due to the novel coronavirus disease (COVID-19).

On the 17th afternoon, the Dunchon Jugong union plans to convene an emergency delegates' meeting to resolve the "matter of changing the management disposition plan." It is expected that this meeting will decide whether to lower the sale price to secure HUG's pre-sale guarantee or maintain the existing sale price and proceed with post-sale. Although voices advocating for post-sale have recently grown within the union, practical issues such as funding make even this option difficult. Dunchon Jugong is a large-scale reconstruction project involving the construction of 85 new apartment buildings with 12,032 households, with construction costs alone reaching approximately 3.1 trillion KRW. A HUG official said, "If the Dunchon Jugong union proposes a lowered sale price, we can negotiate the pre-sale guarantee again."

This content was produced with the assistance of AI translation services.