PPP to Promote Pledge to Lower Apartment Pre-Sale Prices by Raising Floor Area and Building Coverage Ratios

Measures to Lower Pre-Sale Prices Proposed
Raising Floor Area and Building Coverage Ratios, Adjusting National Housing Scale, and Easing Infrastructure Costs

On April 15, the People Power Party announced its plan to include measures to lower apartment pre-sale prices-such as raising the floor area ratio and building coverage ratio standards for new apartment construction, including reconstruction and redevelopment projects-as part of its presidential election pledges. This move is in response to the growing phenomenon of new apartment pre-sale prices surpassing those of existing apartments, and the party aims to address this issue through institutional reforms.

Kwon Seongdong, floor leader of the People Power Party, stated at the floor strategy meeting held at the National Assembly on April 15, "For the first time in 15 years, the nationwide average pre-sale price of apartments has surpassed the average market price. This phenomenon, where the pre-sale price of newly built apartments exceeds the market value of existing ones, has occurred not only in Seoul but also in all 17 metropolitan cities and provinces across the country."

Kwon further pointed out, "For apartments with an exclusive area of 85 square meters, commonly referred to as the 'national standard size,' the nationwide average pre-sale price is about 50 million won higher than the market price, and in Seoul, it is as much as 170 million won higher. As a result, concerns are growing that, instead of making a profit, homebuyers may see their property values fall below the pre-sale price. The so-called 'lottery pre-sale' is now a thing of the past, and there are even self-mocking voices referring to it as 'gyerik pre-sale,' meaning it is of little value."

He added, "Due to the burden of high pre-sale prices, there are increasing cases of apartment development projects being abandoned, and in non-metropolitan areas, the risk of unsold units is intensifying. The People Power Party will actively promote policies to induce a reduction in pre-sale prices as part of its presidential election pledges to normalize the real estate market."

Kwon Sungdong, floor leader of the People Power Party, is speaking at the floor strategy meeting held at the National Assembly on April 15, 2025. Photo by Kim Hyunmin

As measures to lower pre-sale prices, the party proposed raising the floor area ratio and building coverage ratio for new apartment construction, including reconstruction and redevelopment projects; adjusting the proportion of homes built at the national housing scale; easing the burden of infrastructure installation costs; and supporting the resolution of construction cost disputes.

Additionally, the party pledged to establish reasonable alternatives to excessive real estate market regulations, such as the reconstruction excess profit recovery system, the right to request contract renewal and ceiling on rent increases under the lease legislation, heavy taxation on multiple home owners, and the uniform application of the debt service ratio (DSR) regulation.

Kwon emphasized, "The People Power Party humbly accepts the criticism that the government's existing real estate policies have failed to reflect the characteristics and demand of each region. Our real estate policies will be developed with customized approaches tailored to local conditions, focusing on the three pillars of Seoul, the metropolitan area, and non-metropolitan regions."