'First' Half-Price Apartments Supplied in Godeok Gangil "From 350 Million KRW + α"

On the Morning of the 9th, SH Corporation Headquarters Holds 'Godeok Gangil 8·14 Complex Sales Cost Disclosure Briefing'

On the morning of the 9th, at the 'Godeok Gangil 8·14 Complex Sale Cost Disclosure Briefing' held at the SH Corporation headquarters, Kim Heon-dong, President of SH Corporation, is answering questions. Photo by Hwang Seoyul chestnut@

[Asia Economy Reporter Hwang Seoyul] Kim Heondong, president of Seoul Housing and Communities Corporation (hereinafter SH Corporation), announced that the sale price of the first land leasehold housing, so-called 'half-price apartments,' scheduled to be sold in Godeok Gangil 2 District, will be around 350 million KRW.

During the Q&A session at the cost disclosure briefing for the 8·14 complexes in the Godeok Gangil public housing district held at the SH Corporation headquarters on the morning of the 9th, President Kim said, “The sale price of the half-price apartments is expected to be around 350 million KRW (based on a net area of 59㎡).” Unlike conventional sale housing where both the building and land are sold, half-price apartments are land leasehold housing where the developer leases the land to residents and only sells the building. The first 'half-price apartments' will supply 500 units in Complex 3 within Godeok Gangil 2 District, Gangdong-gu, Seoul. Since SH Corporation supplies housing post-construction, there is a possibility of price changes later, but President Kim emphasized, "Unless there is a major change, the price will hardly increase."

The expected sale price of the 'half-price apartments' is based on the average construction cost of the three complexes in Godeok Gangil District, including the 8·14 complexes announced that day. This is because only the building, not the land, is sold. The average construction cost of complexes supplied by SH Corporation in Godeok Gangil District is about 190 million KRW for a net area of 59㎡. The 8th and 14th complexes disclosed that day were 189 million KRW and 201 million KRW, respectively. According to President Kim, considering that the two complexes were completed in November and December 2020 respectively, the construction cost for newly built buildings was estimated at around 300 million KRW, and factoring in the corporation’s profit, this sale price was projected. President Kim said, “Although internal discussions considered up to 390 million KRW, we set the sale price around 350 million KRW, considering the burden on consumers.”

Regarding land lease fees, the exact amount has not been finalized, but the policy is to set it at a level that is not burdensome to buyers. Additionally, a method similar to Singapore’s land leasehold housing, where the land lease fee for 99 years is prepaid in a lump sum at the time of sale, is also being considered as one option. President Kim explained, “In Singapore, a 35-pyeong apartment is sold for 300 to 400 million KRW, which includes the land lease fee for 99 years.” However, since discussions with the Ministry of Land, Infrastructure and Transport and the National Assembly are necessary, President Kim responded, “It is difficult to say anything arbitrarily.”

The half-price apartments supplied in Godeok Gangil District are expected to accept the first round of pre-reservations as early as this year. President Kim said, “SH Corporation supplies housing post-construction, but for half-price apartments, we plan to introduce a reservation system,” and explained, “Unlike pre-sale, if there is a problem during construction, the supplying company, not the consumer, is responsible.” SH Corporation conducts post-sale when about 90% of the construction is completed, and with the pre-reservation system, consumers who win the reservation can review the final price and quality at the time of sale and may choose to forgo the purchase if the conditions are unsatisfactory.

He also expressed ambition to expand the sale of half-price apartments starting with the supply in Godeok Gangil District. President Kim said, “We are establishing plans for 34 complexes (about 40,000 households) owned by the corporation that are approaching 30 years of age,” and added, “We plan to supply not only in Godeok Gangil announced today but also in Wirye, Eunpyeong, and other lands already secured by the corporation.” However, President Kim added, “I want to sell all apartments supplied by the corporation as land leasehold, but I do not have 100% decision-making authority,” and said, “We will continue to make proposals.”