3.3㎡ at 26 Million KRW... Controversy Over Goyang's Sale Prices Higher Than Seoul

Deok-eun District Sale Price Nears 10 Million KRW per 3.3㎡ Increase
Ongoing Controversy Over Sale Price Ceiling System... Growing Voices Claim "Unreasonable Price Calculation"

▲ Perspective view of 'DMC River Park Xi' in A4 block, Deogeun District, Deogyang-gu, Goyang-si, Gyeonggi Province. (Provided by GS Construction)

[Asia Economy Reporter Lee Chun-hee] Controversy surrounding the price ceiling system for apartment sales continues unabated. Criticism is growing that the pricing is unreasonable as the sale prices of public land apartments in Goyang City, Gyeonggi Province, are set higher than those in Seoul.

According to industry sources on the 13th, recently Goyang City Hall approved the sale prices per 3.3㎡ of 'DMC Riverpark Xi' in A4 block and 'DMC Riverforet Xi' in A7 block of Deok-eun District, Goyang City, Gyeonggi Province, scheduled for sale at the end of this month, at 25.83 million KRW and 26.30 million KRW respectively. Considering that the sale price of 'Deok-eun Aileen's Garden' supplied in the same district in December last year was in the 17.20 million KRW range per 3.3㎡, the price has risen by nearly 10 million KRW per 3.3㎡ in half a year.

The sale prices are high compared to other complexes in Deok-eun District as well as other sale complexes in the metropolitan area. The sale prices per 3.3㎡ of 'Deok-eun Daebang Nobland' and 'Deok-eun Jungheung S Class,' supplied in July and November last year respectively, were 19.80 million KRW and 19.06 million KRW. They are even more expensive than 'Hoban Summit Mokdong,' a private land redevelopment apartment in Yangcheon-gu, Seoul, which will start subscription from the 20th, priced at 24.88 million KRW.

Currently, the sale prices of public land apartments are set based on prices reviewed by the local government's sale price review committee, considering land costs and construction costs. Previously, in Wirye New Town and Gwacheon City Knowledge Information Town, the sale prices decided by the local government’s sale price review committees were mostly applied as is. In this process, sale prices are often significantly reduced by not recognizing additional costs for specialized designs, so the sale prices of apartments subject to the price ceiling system are generally set lower than surrounding market prices. This is why predictions arise that a large number of 'price ceiling lotto' cases will be produced once the price ceiling system is implemented.

Industry insiders point to the special characteristics of the site as the reason why such high sale prices were set for DMC Riverpark Xi and DMC Riverforet Xi, which do not follow this conventional wisdom. Currently, Korea Land & Housing Corporation (LH) supplies apartment land in housing development districts or public housing project districts by lottery, but in urban development project districts like Goyang Deok-eun District, land is sold by highest bid auction according to the Urban Development Act.

At the time of bidding for the two sites, the developers bid high prices, which naturally led to high land costs being calculated during the sale price review process. An LH official said, "The developer made a 'bold sale' based on consumers' blind faith that the apartment price would not fall below the sale price due to the good location," adding, "The developer makes a certain profit, and that burden is passed entirely on to consumers."

The problem lies in fairness with private land maintenance projects such as redevelopment and reconstruction. When purchasing land and conducting business like in Deok-eun District, the purchase cost is recognized as land cost, but the land cost for private land maintenance projects is calculated based on the publicly announced land price. This is why complaints sometimes arise from complexes awaiting reconstruction asking for an increase in the publicly announced land price. However, due to the nature of the publicly announced land price, which is still lower than surrounding market prices, the land cost is inevitably recognized lower in the subsequent sale price calculation process, making the sale price lower than that of sale projects through land purchase.

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