Disclosure of Basic Data for Government Officially Announced Property Prices
Aimed at Addressing Complaints over Sharp Price Increases
However, Limited Information Restricts Resolution of Suspicions
[Asia Economy Reporter Jeon Mewon] Although the government has disclosed the basis data for calculating the publicly announced prices of apartment complexes that have been controversial, the controversy over their appropriateness seems to be spreading instead. Due to the sparse information, it is insufficient to dispel the public’s suspicions and distrust. Contrary to the government’s expectation that public dissatisfaction would decrease with the disclosure of the basis data, demands for reform of the publicly announced price system and tax resistance are expected to continue.
According to the Ministry of Land, Infrastructure and Transport on the 29th, the basic data for calculation disclosed along with the publicly announced prices through the Real Estate Public Price Informer website is largely divided into publicly announced prices, housing characteristic data, price reference data, and calculation opinion items.
The housing characteristic data is divided into ‘surrounding environment,’ which indicates nearby education, public amenities, and transportation facilities; ‘complex characteristics,’ which includes land use zone, number of households, number of parking spaces, building coverage ratio, floor area ratio, etc.; and ‘household characteristics,’ which contains the number of households of the same area and direction.
As for the price reference data, it contains actual transaction cases of houses of the same area in the relevant complex or similar nearby houses. The purpose is to estimate the basis for calculating the publicly announced price by checking when and at what price similar nearby houses were traded. Along with this, the price reference data also includes the upper and lower limit price information as of January this year from ‘Real Estate Tech,’ a housing price information site managed by the Korea Real Estate Board.
The calculation opinion item explains the process of finally calculating the publicly announced price by comprehensively reviewing the above factors. However, all these data are mostly information already disclosed to the public and are not special, making it difficult to resolve the controversy. In particular, the calculation opinion, which is automatically written by extracting characteristics with a computer, is only at the level of “calculated by comprehensively considering” and fails to dispel the suspicions of homeowners dissatisfied with the publicly announced prices.
For example, Daewon Yeonrip 77.19㎡ (1st floor) in Bulgwang-dong, Eunpyeong-gu, Seoul, saw its publicly announced price rise sharply from 284 million KRW last year to 1.049 billion KRW this year, but the calculation opinion only explains that “the transaction prices and price levels of similar apartment complexes were comprehensively considered.” The industry views this as due to a significant price surge last year driven by redevelopment expectations, but the reference data only lists cases traded at 1.5 billion KRW and 1.6 billion KRW nearby last year, without detailed explanations such as ‘redevelopment expectations’ or ‘sharp rise in actual transaction prices.’
Even houses in the same complex with similar floor, area, and direction have differences in publicly announced prices, and the explanations are insufficient to dispel suspicions. For example, Banpo Familia Apartment 84.63㎡ (6th floor) in Seocho-gu has a publicly announced price of 967 million KRW, while another building’s 84.12㎡ unit is assessed at 881 million KRW. It remains difficult to know exactly why the publicly announced prices differ.
The industry voices calls for the government to disclose the appropriate market prices and the rate of market price reflection used as the basis for calculation. However, the government’s position is that since there are 14.2 million apartment units nationwide subject to public announcement and the process of adjusting the realization rate is still ongoing, it is difficult to disclose more accurate data. The Ministry of Land, Infrastructure and Transport stated, “Since this is the first time basic data is being conducted nationwide, we plan to collect opinions and make improvements going forward.”
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