Government Mulls Allowing Disclosure of Apartment Net Costs

“The government will consider disclosing the net pre-construction offering costs of apartments built by Korea Housing Corporation,” Transportation and Construction Minister Kang Dong-seok said, commenting on the national debate on whether or not to disclose pre-construction offering costs of apartments.

In a policy coordination meeting with the Uri Party at the National Assembly on March 29, the minister said, “We will decide whether to allow the disclosure ahead of schedule, before the decision of the overview board on the institution of housing supply.”

The ministry has agreed to disclose the costs of housing sites but remained skeptical about the disclosure of the overall costs. The remarks by Minister Kang clearly showed a shift in policy.

The disclosure of pre-construction offering costs by Korea Housing Corp. will likely pressure private developers.

Commenting on the overheated pre-construction offering of City Park in Seoul, Kang said, “About 1,406 units in nine complexes were sold in the past 30 days so they were allowed for the resale of pre-construction purchases.” He said, “I will discuss with local governments in order to cool overheated pre-construction sales by raising application deposits.”

“The government will reduce the number of substandard housing units to 2.3 million by 2006 from 3.3 million this year,” he said. “Korea Housing Corp. will purchase 500 multi-housing units starting in May to distribute them to low-income families for a monthly rent of 100-150 thousand won in a pilot project starting September.”

The Citizens` Coalition for Economic Justice, a civil group advocating the disclosure, said in a statement, “If Minister Kang’s remarks are not a public stunt ahead of the elections, he should implement the policy immediately.”

Kwang-Hyun Kim kkh@donga.com