Seoul City and SH Reveal 'Apartment Sale Cost' Including Land Development Cost for the First Time

Recent 10 Years Construction Complexes Including Godeok Gangil 4 Complex
Godeok Gangil 4 Complex Sale Price 18.75 Million KRW per Pyeong... Sale Cost 15.85 Million KRW

[Asia Economy Reporter Kim Hyemin] The Seoul Metropolitan Government and Seoul Housing and Communities Corporation (SH Corporation) will fully disclose 71 items, including the apartment sale cost constructed by SH Corporation and the land development cost used as the basis for cost calculation. While some places have previously disclosed design and contracting details, this is the first time the apartment sale cost itself is being calculated and disclosed.

On the 15th, Seoul City and SH Corporation announced that starting with the Goduk Gangil 4 Complex in Gangdong-gu, they will disclose the sale costs of 34 construction complexes completed in the last 10 years by next year. The information disclosure will be conducted through the Seoul City and SH Corporation websites.

The disclosure of apartment sale costs is a campaign pledge of Mayor Oh Se-hoon and is included in the five major innovation plans of SH Corporation announced last November. The disclosed items include 61 construction cost items and 10 land development cost items. Notably, the disclosure of land development costs, which have accounted for more than half of apartment prices and have been strongly demanded for transparency, is significant.

Until now, Seoul City and SH Corporation have only announced the sale prices. Even during the disclosure of sale costs for the Hangdong Public Housing District 4 Complex last year, only construction cost items were disclosed, excluding land development costs. The 10 land development cost items disclosed for the first time this time are ▲land cost ▲land burden charges ▲development cost ▲infrastructure installation cost ▲relocation measures cost ▲direct labor cost ▲sales expenses ▲general administrative expenses ▲capital cost ▲other expenses.

Along with this, Seoul City and SH Corporation will also disclose hundreds of pages of design and contracting details. This is a kind of raw data containing detailed grounds and objective indicators related to the sale cost. At the same time, they plan to transparently share the process of returning profits to citizens by disclosing the usage plan for the sale profits obtained compared to the sale price.

The first disclosure target, Goduk Gangil 4 Complex, is the most recent apartment built by SH Corporation, with construction completed and settlement finalized last September. The total sale cost was 176.58 billion KRW, with land development cost at 2,717,119 KRW per square meter and construction cost at 2,086,640 KRW per square meter. The sale cost converted to 3.3 square meters by combining land development and construction costs is calculated at 15.852402 million KRW. Compared to the actual sale price (an average of about 18.7 million KRW per 3.3 square meters), there is a difference of about 2.85 million KRW.

The sale profit obtained this way is 98.053 billion KRW. This profit was used for ▲construction costs of rental housing in Goduk Gangil 4 Complex (26.011 billion KRW) ▲SH Corporation’s rental housing maintenance costs incurred in 2019 (47.545 billion KRW) ▲purchase of multi-family rental housing in 2019 (24.497 billion KRW), among others.

The city plans to complete the disclosure of sale costs for 28 complexes that have already been completed and settled by the first half of next year. For the five complexes that are about to be completed and settled, the sale costs will be disclosed in the second half of the year after verification procedures for each complex. Going forward, apartments developed by SH Corporation will, in principle, transparently disclose sale costs and plans for the use of sale profits.

Kim Heondong, President of SH Corporation, said, "As a construction public enterprise operated with taxpayers’ money, we will realize open and transparent management," adding, "We hope that by significantly expanding the scope of disclosure to include 61 sale cost items, land development costs, and design, contracting, and subcontracting details, we can contribute to eliminating the inflated bubbles in housing sale prices."

Kim Seongbo, Director of the Seoul City Housing Policy Office, said, "This is the first time for a local government to disclose land development costs, construction costs, subcontracting, and design details in such detail," and added, "This expanded disclosure of sale costs is meaningful in that it transparently provides accurate information to the citizens, who are the owners."

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