Standard Construction Cost for Pre-Sale Price Ceiling System Rises 1.59%

Ministry of Land Announces on the 15th

The Ministry of Land, Infrastructure and Transport announced on September 15 that the standard construction cost has increased by 1.59% compared to six months ago, reaching 2,174,000 won per square meter. The standard construction cost is one of the components used to set the price ceiling for housing units subject to the pre-sale price cap system. This figure is officially announced every six months, on March 1 and September 15 each year.

The pre-sale price cap system applies to public land and, among private land, to regulated areas such as speculative zones. The price ceiling is determined by adding the standard construction cost, land cost, additional land costs, and additional construction costs.

The rise in the standard construction cost reflects changes in construction expenses. Six months ago, it also increased by 1.61%, and this time the increase is at a similar level. Last year, each announcement saw increases in the 3% range, so the rate of increase has somewhat slowed. The Ministry explained that the model used as the calculation sample has been updated for the first time in five years.

The revised announcement will apply to complexes that apply for resident recruitment approval from this day onward. The actual pre-sale price is determined by the local government's price review committee, taking into account the standard construction cost, land cost, and other additional expenses.

View of apartments and other buildings from Namsan, Seoul. Photo by Yonhap News Agency

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