Standard Construction Cost Under New-Home Price Ceiling to Rise to 2.328 Million Won per Pyeong

[Financial News] The Ministry of Land, Infrastructure and Transport (MOLIT) will raise the standard construction cost applied under the price ceiling system for new apartment sales.
According to MOLIT on the 14th, the ministry will issue its regular notification of the standard construction cost applicable under the price ceiling system for new apartment sales on the 15th.
The standard construction cost is one of the components used to determine the maximum sale price of homes subject to the price ceiling system. It is officially notified twice a year, on March 1 and September 15. An unscheduled adjustment system is also in place for sharp increases in the prices of major construction materials, such as high-strength reinforcing steel, ready-mix concrete and window glass. The system applies to multi-unit housing supplied in public housing sites and in private housing sites subject to the price ceiling system, including Gangnam-gu, Seocho District, Songpa District and Yongsan District.
Under the latest notification, the standard construction cost for above-ground floors in buildings with 16 to 25 floors and exclusive-use areas of 60 to 85 square meters will rise 4.07%, from 2.237 million won per square meter in the unscheduled notification issued on July 15 to 2.328 million won.
The expanded increase is largely attributable to higher indirect construction costs. As the government moved to strengthen support for safety investments at every stage of construction, the “2026 Indirect Construction Cost Application Standards for Cost Calculations” announced by the Public Procurement Service (PPS) on April 16 were reflected in the latest notification. As a result, indirect construction costs jumped 9.77%, from 604,000 won to 663,000 won. In detail, the applicable rate for indirect labor costs was adjusted from 14.6% to 18.1%, while other expenses rose from 6.0% to 6.9%.
The revised notification will apply to housing complexes that apply for approval to recruit residents after September 15. However, actual sale prices will be finalized by local housing sale price review committees after comprehensively considering land costs, the standard construction cost and various additional expenses.
MOLIT said it plans to support sufficient and swift housing supply so that actual demanders without homes can purchase their own homes at affordable prices. The ministry also plans to adjust the standard construction cost reasonably by reflecting fluctuations in construction-material prices, enabling the supply of high-quality apartments incorporating the latest technologies and construction methods.

[email protected] Jung Kyung-soo Reporter