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A Discussion on the Introduction of the Price Ceiling System on the NewlyBuilt Apartment

  • Public Land Law Review
  • Abbr : KPLLR
  • 2019, 88(), pp.1-20
  • Publisher : Korean Public Land Law Association
  • Research Area : Social Science > Law
  • Received : October 31, 2019
  • Accepted : November 20, 2019
  • Published : November 28, 2019

Min, Tae-Wook 1

1한성대학교

Accredited

ABSTRACT

Recently the government announced that the price ceiling system on the newly built apartment, which in reality abolished, would be introduced. The price ceiling system on the newly built apartment is a highly controversial topic. The government assert that it will cause housing prices falling, but opponents assert that in long- term it will cause housing prices rise because of supply decrease. To acquire legal justification, the goal of the system should be just and it should be suitable, necessary, balanced means. Our economic system is fundamentally based on free market system, on the same time the government can control and adjust the economy to achieve social justice. Considering the importance of housing price stability, the goal of the system is conceded as just. The primary cause which leaded to rise of housing price recently is low interest rate and the resulting expansion of credit. Therefore the policy which pursuing stability of housing price should focus on interest rate and credit. The system is only accessorial means. The effect of the system is not verified. To heighten an effect and to minimize side effects of the system, it is needed to supplement the standard for price calculation. Cost of standard apartment building includes construction cost, ​administrative cost, interest, profit. So it is desirable to open standard in detail for important items and to get a consensus on the level of profit. Additional construction cost and additional land cost are only expected cost which differ from actual cost. To achieve the goal of the system, it is needed to control these additional cost much more tightly.

Citation status

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