"A 700 Million Won Contribution Bill Looms"... Reconstruction Construction Costs Hit All-Time High at 13 Million Won per 3.3 Square Meters

The era of construction costs for redevelopment and reconstruction projects surpassing 10 million won per 3.3 square meters began in earnest in 2024. About two years later, a new all-time high has emerged, with costs climbing above 13 million won.
According to the industry on the 24th, the construction cost for Mokhwa Apartments in Yeouido, which recently issued a bid notice for contractors, has been set at 13.7 million won per 3.3 square meters. Through reconstruction, Mokhwa Apartment will be reborn as a complex with up to 49 floors and 416 households. The previous record was Sinbanpo 22nd Apartment Complex in Jamwon-dong, Seocho-gu, which signed a contract in 2024 at 13 million won per 3.3 square meters.
A review of association bid notices shows that the 10 million won era for construction costs began in 2024. At the time, the Namyeong-dong Business District Zone 2 Redevelopment in Galwol-dong, Yongsan-gu, and the Mapo-ro 1 District, Zone 10 Redevelopment in Dohwa-dong, Mapo-gu, Seoul, were among the first to propose construction costs exceeding 10 million won at the initial stage of contractor selection.
This year, 10 million won per 3.3 square meters has become the baseline. Major redevelopment sites in Seoul seeking contractors are now putting forward prices above that level. In the case of Apgujeong District 5, the construction cost stands at 12.4 million won per 3.3 square meters. Apgujeong District 4 has proposed 12.5 million won, while the Seongsu Strategic Redevelopment Zone is also exceeding 11 million won.
Construction costs continue to rise. According to the Korea Institute of Civil Engineering and Building Technology (KICT), the construction cost index for March reached 134.42, the highest level since the index began. That was up 2.5% from a year earlier, when it stood at 131.11. The pace of increase has slowed, but the trend remains upward.
Higher construction costs are translating into larger contributions from association members. In the case of Eunma Apartment in Gangnam District, the additional contribution required due to recent cost increases has risen by about 200 million to 300 million won in less than a year. There are also analyses suggesting that the estimated contribution for the first-generation new town reconstruction projects, which the government is aggressively promoting, could reach as much as 700 million won in Bundang.
Choi Won-cheol, a supervising professor at Yonsei University, said, "The impact of the war has not yet been reflected," adding, "As construction costs surge by 30% to 40%, there are forecasts that association members' contributions will also rise by at least 20%." He continued, "It seems unlikely that any first-generation new town complexes will be able to break ground in 2027," and added, "In places such as Ilsan New Town, rising contributions could also shift sentiment toward abandoning reconstruction altogether."
ljb@fnnews.com Lee Jong-bae Reporter