Original Construction Prices to be Partially Disclosed

Some original construction prices of apartment units will be made public. The targets are apartment units with floor area of less than 25.7 pyong (one pyong equals 3.3 square meters) built on public land by private or public housing corporations such as the Korean National Housing Corp. Also, the cost peg system, which imposes ceiling on construction prices, will be introduced. Original construction prices of apartment units with floor area greater than 25.7 pyong built on public land by private housing companies or apartments built on private land need not be disclosed.

The government and the ruling Uri Party agreed to this on Wednesday.

The government and the ruling party plan to revise the Housing Law within this year and enforce the law on the apartments for pre-sale from next year.

Costs of land, construction, additional items, design and supervision, etc. will reportedly be disclosed.

“Disclosure of construction prices for each construction process might cause problems such as revealing business secrets and know-how of housing companies,” said Assembly Member Ahn Byong-yub of the Uri Party. “The consumers’ right to know will be protected if major costs are disclosed after the approval of pre-selling.”

For apartments with more than 25.7 pyong of floor area, they are not required to disclose the original construction prices, but they have to adopt the so-called land bond bidding system and disclose only land prices.

Meanwhile, the controversy over the construction prices disclosure might continue, as civic groups such as the Citizens Coalition for Economic Justice that urge the full disclosure and the housing corporations are both strongly against the decision.

Kwang-Hyun Kim Eun-Woo Lee kkh@donga.com libra@donga.com