Price Ceilings for Private Apartments

Price ceilings will be applied to private apartments starting as early as next year.

The government and the ruling Uri Party concluded a government-party agreement at the National Assembly building attended by Kim Geun-tae, the chairperson of the party, Kwon Oh-gyu, the Deputy Premier and Minister of Finance and Economy, and Lee Yong-seop, the Minister of Construction and Transportation, and reached an agreement to freeze the price of private apartments.

Since the government and Uri Party asserted the date of implementation should be in July next year and in 2008 respectively, they decided to have further discussions on this issue. If the ceiling system is implemented from next year, the liberalization of sales prices will come to an end in the 8th year from its full adoption in 1999.

The government and the ruling party also agreed on the adoption of the minus option system in which the construction company constructs only the basic foundation and leaves the selection of finishing materials with the residents as a measure to lower the sales cost of apartments.

But they failed to come to an agreement on the issues regarding the date and the method of the adopting of sales on the condition of redemption that gained attentions with the suggestion of ‘half-price apartments’, expanding the disclosure of original sales costs, and the development of public management on public lands for housing.

Experts in immovable assets anticipate that the ceiling on the price of private apartments will help stabilize the price of housings in the short run, but will bring about considerable adverse effects in the long run such as the constriction of the supply of apartments.

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