'National Standard Size' Rises Another 5.15 Million Won... Standard Construction Cost for Presale Price Calculation Up 2.12% [Real Estate AtoZ]

Applied to apartments under the price ceiling system
2,174,000 won per square meter → 2,220,000 won per square meter

The standard construction cost used to calculate presale prices for housing subject to the presale price cap system, including apartments in the three Gangnam districts of Seoul and Yongsan District, has risen by 2.12% in six months. As a result, apartment presale prices are expected to continue their upward trend.

On the 27th, the Ministry of Land, Infrastructure and Transport announced that it will raise the standard construction cost for housing subject to the presale price cap system (for 16-25 story buildings, with exclusive areas of 60-85㎡ on above-ground floors) from 2,174,000 won per square meter to 2,220,000 won per square meter. The ministry explained that the change reflects shifts in construction costs.

Converted to an 84㎡ apartment, the most commonly supplied exclusive area (based on a supply area of about 112㎡), the maximum construction cost for above-ground floors comes to 248.64 million won, which is about 5.15 million won higher than before. The revised notice will apply to complexes that apply for approval to recruit occupants from March 1.

New and old apartments in Seoul, and an apartment under construction. Photo by Heo Yeonghan

The standard construction cost is one of the components used to set the presale price ceiling for new apartments subject to the presale price cap system. This ceiling is made up of the standard construction cost, land cost, additional land cost, and additional construction cost. Reflecting actual fluctuations in construction expenses such as material and labor costs, it is officially announced twice a year, on March 1 and September 15.

The presale price cap system applies to apartments supplied on private land within overheated speculative districts such as Gangnam-gu, Seocho-gu, Songpa-gu, and Yongsan-gu in Seoul, as well as to apartments supplied on public land nationwide.

The latest increase is larger than the two adjustments announced last year (1.61% in March and 1.59% in September). In 2024, prices of materials such as ready-mixed concrete and labor costs rose simultaneously, pushing both adjustments into the 3% range. After that, the rate of increase narrowed, but has now expanded again.

However, an increase of 2.12% in the standard construction cost does not mean presale prices will rise by the same rate. Actual presale prices are ultimately determined by the presale price review committee of the relevant local government, which comprehensively considers not only the standard construction cost but also land costs and various additional costs.

This content was produced with the assistance of AI translation services.