Dunchon Jugong Land Cost Reduced by 8% for Reapplication... What Is the Sale Price?

Passing Price Around 35 Million KRW per Pyeong
Expectations for Under 900 Million KRW for 59㎡ Exclusive Area
Uncertainty Due to Unconfirmed Construction Costs

[Asia Economy Reporter Jo Gang-wook] The land cost reappraisal value for the Dunchon Jugong reconstruction apartment complex in Gangdong-gu, Seoul, considered the largest reconstruction site in the country, has decreased by about 8% compared to the previous amount. Attention is now focused on whether it can pass the appropriateness evaluation by the Korea Real Estate Board this time.

According to the maintenance industry on the 31st, the Dunchon Jugong Reconstruction Association recently reapplied for a land cost appraisal of 18.64 million KRW per square meter through Gangdong-gu Office. This is 1.56 million KRW lower than the previously submitted 20.20 million KRW per square meter to the Real Estate Board by Gangdong-gu Office. Last month, the Real Estate Board notified that overall supplementation was needed, such as sample surveys and comparative evaluation analysis methods, effectively judging that the land cost appraisal amount was excessively high.

Previously, if the land cost was set at 20.20 million KRW per square meter, the general sale price was estimated to exceed 37 million KRW per 3.3㎡ (pyeong). Considering the approximately 8% reduction in land cost, the sale price per pyeong could be around 34 to 35 million KRW. Accordingly, there is speculation that the sale price for a 59㎡ exclusive area might not exceed 900 million KRW, which is the standard for mid-term loan and special supply allocation.

However, the construction cost, which determines the additional cost?a major basis for calculating the sale price?has not been finalized for Dunchon Jugong. There is a disagreement between the Dunchon Jugong association and the construction company regarding the validity of the 3.2 trillion KRW construction cost decided at the general meeting in June 2020, and the construction team has even announced a suspension of construction starting next month on the 15th. Due to the increase in construction costs, it is uncertain whether the sale price can be guaranteed to remain below 900 million KRW.

Moreover, despite the lowered price, there are still criticisms that the application amount is high compared to other complexes. The official land price of Dunchon is 9.86 million KRW per square meter, making 18.64 million KRW about 1.9 times the official land price. In contrast, the official land price of Sindonga Apartment in Gil-dong, also in Gangdong-gu, is 7.755 million KRW per square meter, and the land cost appraisal amount is about 14 million KRW, approximately 1.7 times the official land price. The sale price there was around 27.8 million KRW per pyeong. Raemian One Bailey in Seocho-gu also had a land cost appraisal about 1.8 times the official land price. Because of this, the possibility of passing remains uncertain. Until now, the market has predicted that the land cost for Dunchon Jugong would be formed at around 17 million KRW, about 1.7 to 1.8 times the official land price.

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