'Dilemma' Dunchon Jugong, Will They Lower the Sale Price or Choose Post-Sale?

HUG Communicates Intention to Reject Sale Guarantee... Association Calls Emergency Delegate Meeting on 17th

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 redevelopment project of Dunchon Jugong Apartments in Dunchon-dong, Gangdong-gu, considered the biggest redevelopment project in the Gangnam area of Seoul, has reached a deadlock. The Housing and Urban Guarantee Corporation (HUG) rejected the pre-sale guarantee, putting the project at a crossroads to either lower the general sale price or opt for post-sale. There are concerns that if administrative procedures are delayed, the project may not avoid the private land pre-sale price ceiling system.

According to the maintenance industry on the 17th, the Dunchon Jugong redevelopment association will hold an emergency delegates meeting in the afternoon. The key agenda is the 'Change of Management Disposition Plan,' where they will discuss follow-up measures after HUG rejected the pre-sale guarantee application submitted by the association.

The day before, HUG rejected the pre-sale guarantee application from the Dunchon Jugong association. Although HUG suggested an average price of less than 30 million KRW per 3.3㎡ during preliminary consultations, the association applied for the guarantee based on the general sale price of 35.5 million KRW per 3.3㎡, as decided at last year's general meeting. A HUG official stated, "If the association lowers the sale price and reapplies for the pre-sale guarantee, we can reconsider."

At the emergency delegates meeting, the association is expected to discuss whether to lower the sale price as requested by HUG and reapply for the pre-sale guarantee, or to seek other options such as post-sale or rental followed by sale. Recently, some association members have advocated for post-sale to increase the general sale price. However, the industry response is that post-sale is realistically difficult. A maintenance industry official said, "Dunchon Jugong is a mega redevelopment project building 12,000 households with construction costs exceeding 3 trillion KRW," adding, "In the case of post-sale, the burden of construction cost financing and financial expenses is too great."

With the pre-sale price ceiling system imminent, the association's room for maneuver is limited. To avoid the price ceiling system, the revised general sale price must be reflected in the management disposition plan by the 28th of next month, followed by holding a change general meeting and completing the resident recruitment announcement. However, the Ministry of Land, Infrastructure and Transport is considering postponing the application of the pre-sale price ceiling system, taking into account the difficulty of holding association general meetings due to the impact of the novel coronavirus (COVID-19), which is a variable factor.

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