SH Urban Research Institute: "To Ensure a Fair Market, Post-Sale System Expansion and Continued Disclosure of Sale Costs Are Necessary"

The Seoul Housing and Communities Corporation (SH Corporation) SH Urban Research Institute argued that the post-sale system and disclosure of sale cost prices should be continuously implemented to create a transparent sales market.

Seoul Housing and Communities Corporation building exterior
[Photo by Seoul Housing and Communities Corporation]

SH Corporation announced this on the 2nd while disclosing the actual sale right prices (completion cost prices) of 32 complexes supplied until last year. Among them, an analysis of the completion cost price disclosure data of 26 complexes including Naegok, Magok, Hangdong, Ogeum, and Godeokgangil showed that SH Corporation earned an average sales profit of over 19%. The sales profit was calculated by subtracting the sale cost price, composed of land cost and construction cost, from the sale price. This means that the proportion of sales profit in the sale price averaged 19.4%.

By district, Magok District earned the lowest average sales profit of 8.8%. This was followed by Naegok at 17.6%, Hangdong District at 18.7%, Segok District at 20.3%, and Ogeum and Godeokgangil Districts at 34%, respectively.

Based on SH's analysis cases, the sales profits of major metropolitan area land development public corporations L Company, G Company, and I Company were estimated. L Company earned 35.8%, G Company 12.4%, and I Company 16.5% in sales profits. L Company’s estimate was based on seven complexes supplied from 2011 to 2021 (Wirye A, Wirye B, Suseo A, Seongnam Godeung A, Gwacheon A, B, C). G Company’s estimate covered eight complexes supplied from 2013 to 2018 (Wirye AA, Wirye AB, Dasan Jingeon A, B, C, D, E, Dongtan A). I Company’s estimate was for the Geomdan A complex supplied in 2018.

The estimation method was the same as SH Corporation’s, using the land cost disclosed by each institution for the respective project district, converted based on the supply area per complex. Construction costs were calculated per complex using the basic construction cost (construction cost + additional cost) announced just before the recruitment announcement date.

When supplying a 59㎡ exclusive area, the sales profit per household was highest for L Company at 170 million KRW, followed by SH at 72 million KRW, I Company at 48 million KRW, and G Company at 35 million KRW.

Based on the estimated sale cost prices and sales profits by supply entity, the estimated sale price per household for a 59㎡ exclusive area housing supply was 370 million KRW for SH, 487 million KRW for L Company, 289 million KRW for G Company, and 295 million KRW for I Company. Meanwhile, the estimated sale cost prices were 298.5 million KRW for SH Corporation, 312.9 million KRW for L Company, 253 million KRW for G Company, and 247 million KRW for I Company.

Cheon Seong-hee, head of the SH Urban Research Institute, said, “This comparative analysis confirmed that there is a difference between the sale cost price at the time of recruitment announcement and the actual sale cost price,” adding, “As a public institution, changes such as disclosure of the actual sale cost price and expansion of the post-sale system are necessary to guarantee citizens’ right to know and transparent management.”

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