Dunchon Jugong, "Let's Sell at the Higher Price Between HUG and the Price Ceiling System"

On the 13th, demolition work for reconstruction is in full swing at Dunchon Jugong Apartment in Gangdong-gu, Seoul. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Lee Chun-hee] The Dunchon Jugong Apartment Reconstruction Association in Dunchon-dong, Gangdong-gu, Seoul, has made its final move. They plan to proceed with the sale at the price of 29.78 million KRW per 3.3㎡, which was agreed upon with the Housing and Urban Guarantee Corporation (HUG), but will immediately halt sales if the price determined under the private land price ceiling system is higher.

According to industry sources on the 10th, the Dunchon Jugong Association conveyed this position through a notice sent to its members. They decided to sell at the higher price between the 29.78 million KRW per 3.3㎡ agreed with HUG and the price derived under the private land price ceiling system.

Dunchon Jugong, which had internal conflicts between the association and its members over pre-sale and post-sale, planned to hold a general meeting on the 9th to vote on whether to accept the sale price based on HUG's high-price review criteria and proceed with the sales schedule. However, former association head Choi Chan-sung decided to cancel the meeting, stating, "Since many members do not recognize the sale price in the management disposition plan, it seems practically difficult to pass the resolution even if the meeting is held," and stepped down from his position, plunging the area into confusion.

Previously, the Dunchon Jugong construction consortium (Hyundai Engineering & Construction, HDC Hyundai Development Company, Daewoo Engineering & Construction, Lotte Engineering & Construction) had announced that if the sales schedule was not set at the general meeting, they would halt construction, making delays in the completion schedule inevitable.

To overcome this deadlock, the association's final move is to accept both the HUG-reviewed sale price and the price under the price ceiling system for comparison. To this end, the association applied for a land appraisal at Gangdong-gu Office on the 10th and plans to apply for general sales before the expiration of the grace period for the expansion of the private land price ceiling system on the 29th.

According to the association, at a special general meeting to be held between mid-August and early September, a proposal to proceed with general sales at 29.78 million KRW per 3.3㎡ "with automatic cancellation conditions" will be put to a vote. If this agenda passes, the sale price will then be compared with the ceiling price derived through the land cost appraisal. If the price under the ceiling system is set higher, the existing plan to sell at 29.78 million KRW per 3.3㎡ will be automatically canceled. Through this method, they intend to sell at the higher of the two prices.

The association explained that this method is possible because the HUG guarantee has a validity period. They stated that the two-month validity period allows for a grace period in applying the price ceiling system. To this end, the association plans to seek conditional sales approval or deferment through the discretion of the Gangdong-gu mayor. They intend to enforce this plan through meetings with the approval authority, including the Gangdong-gu mayor.

Finally, the association appealed to its members, saying, "If the price ceiling system is advantageous, the current executive board has also resolved to resign en masse," and asked for help in normalizing the project.