Basic Construction Cost Rises 2.64%... Maximum Amount per ㎡ Set at 1,829,000 Won
Utilization in Calculating Sale Prices of Apartment Complexes Subject to Sale Price Ceiling System
Due to rising prices of construction materials and labor costs, the standard construction cost will increase by 2.64% starting March 1. The standard construction cost is used to calculate the sale price of apartment units subject to the price ceiling system.
The Ministry of Land, Infrastructure and Transport announced on the 25th that the upper limit of the standard construction cost will rise by 2.64% from March 1. Accordingly, the upper limit per square meter will be adjusted from 1,782,000 KRW to 1,829,000 KRW.
The Ministry regularly adjusts and announces the standard construction cost every six months (March 1 and September 15 each year) by reflecting factors affecting construction costs.
Breaking down the increase factors, of the 2.64% rise, 1.63 percentage points are due to increases in direct construction costs such as prices of major materials like rebar and labor costs, and 0.79 percentage points are due to linked indirect construction costs, indicating that the rise in direct construction costs was the main factor.
The revised notice will apply to those who apply for approval of tenant recruitment from March 1, 2022 onwards.
The standard construction cost is applied when calculating the sale price of housing subject to the price ceiling system (land cost + land cost surcharge + standard construction cost + construction surcharge).
The Ministry explained that the actual sale price is determined comprehensively by considering factors such as marketability and surrounding market prices, so the impact on the actual sale price is lower than the increase in the standard construction cost.
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The Ministry stated, "We will continue to support non-homeowners in securing affordable homes through smooth housing supply, and rationally adjust the standard construction cost by reflecting fluctuations in construction material prices to ensure the supply of high-quality apartments applying the latest technologies and materials."
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