Pangyo Homes: 16 Million Won per Pyeong

The Ministry of Construction and Transportation announced a revised housing bill with the following details as part of a package of comprehensive real estate measures yesterday.

130 to 200 Million Won Needed for 45-pyeong Apartment Unit–

The maximum bond ceiling when contracting a 45-pyeong apartment unit in Pangyo is estimated to be 343 million won.

Bonds can be sold immediately after being purchased, so even if bidding is done at 343 million won, you only need to have 120 million won in your hands.

Payments on bonds can be divided, so based on a 343 million won bond, the remainder exceeding 100 million won, in this case 243 million won, can be paid throughout two sessions. One is during the beginning of the contract, and the other during the arrear payment, with each payment at 121.5 million won.

That is, at the beginning of the contract, you only need to have the loss amount of the 221.5 million won bond, which amounts to 77.52 million won.

Accordingly, if the down payment is 20 percent of the sale price (120 million won), the individual who is contracting will need to have 197.52 million won in cash. If the down payment is 10 percent of the sale price (60 million won), 137.52 million won would be needed.

The bond bidding system selects among the apartment subscribers who have the highest biddings in order to prevent from acquiring excessive marginal profits.

However, in order to purchase a 45-pyeong unit, one needs to have approximately 200 million won in cash. This means that only those who have enough plus some to spare will be able to subscribe, and this is expected to bring forth controversy.

Residential-Commercial Apartment Units Cannot be Sold for Five Years After Purchase-

The banning of reselling purchase rights, which was originally planned to be applied only to apartments in public housing lands, will be expanded to include residential-commercial apartments as well.

Reselling will be banned for five years in the Seoul metropolitan area in places where overpopulation must be controlled including Pangyo New City and where development is to be managed. Other than the above-mentioned areas, the ban will be for three years.

The restricted period for winning again a purchase right for apartment units in the public housing land will be the same period as the banning period of reselling purchase rights.

Apartment units with exclusive areas of 25.7 pyeong or less will be prohibited to win a purchase right again for 10 years in the Seoul metropolitan area and five years in local areas. Those surpassing 25.7 pyeong will be prohibited for five and three years, respectively.

The rent for rental homes located on public housing land will be fixed at market-level. Householders who do not own a home, the first priority purchasers for subscription savings installments deposits, will be given priority.

A “purchase right paparazzi” system will be introduced, and a maximum of 500,000 won for each case will be given in reward for reporting a person who violates the banning period for reselling purchase rights.

Transfers on all public housing land, excluding the housing land of the resident, will be prohibited until registering the transfer of ownership. This is expected to put a brake on practices inflating the land prices such as receiving premiums and selling the purchased public housing lot before the registering the ownership transfer.

Operators developing public housing land will have to open to the public seven cost price items including land price, funding, labor cost, moving expense, selling price, general management expense and other costs.

Meanwhile, the 3,640 apartment units that private firms will design and build for units surpassing 25.7 pyeong in the exclusive area in Pangyo will be built into 35-story apartments.

Seung-Heon Lee Jae-Seong Hwang ddr@donga.com jsonhng@donga.com