Uri Party Gives Up Its Election Pledge of Making Apartment Prices Public

The Uri Party has publicly given up on its public pledge from the last general election that it would lower the sales price of apartments and that it would make public the original sales price of apartments built by the Korean Public Housing Corporation.

Instead, the party has decided to restrain the price increase of small-scale apartments with the adaptation of a “flexible price system based on other prices” of the original prices with which apartments smaller than 25.7 pyong determine its price with the standard construction fee added to the land price.

The Uri Party and the Ministry of Construction and Transportation held a party politics discussion at the National Assembly on June 1 and said, “a problem could arise in the housing supply to non-popular areas” on the subject of publicizing the original sales price of public housing.

“The flexible system is actually the same thing to publicizing the original price with the public land price and the standard construction fee added together,” said Hong Jae-hyung, policy committee chairman. “If this policy was adapted, the price could go down by 2 million won per pyong in the metropolitan area, which is 30 percent less than normal prices.”

The party also decided to change the current drawing system of the public land supply method to bond bids in which the development interest will be returned in bidding bonds.

However, this flexible price system proposes a restriction on setting the sales price, and there are claims that the private sector’s small-sized apartments could be reduced and also that the policy will be met with opposition from the industry.

In particular, if bond bidding gives a rise to the land price, the sales price increase of medium- or large-scale apartments is inevitable and will give rise to overall apartment price increases.

The Citizens’ Coalition for Economic Justice released a comment saying, “Their giving up on publicizing the original price of public apartments is deserting their own promise to the people,” and criticized, “The flexible price system could earn a temporary price decrease in the sales price, but it cannot be a fundamental policy to stabilize the real estate market.”

Hoon Lee dreamland@donga.com