President Kim Sun-dock of the Korea Housing and Urban Guarantee Corp.

Korea Housing and Urban Guarantee Corp. (HUG) launched its project to develop an index for average prices of apartments to supplement discrepancies in the sales of new apartments around the country.

The company expects to complete the index and allow it to be used as a base to help set prices for new apartments in Korea.

HUG officials said they started to work on supplementary indices to supplement the prices of new apartments around the country, and from early next year, prices of new apartments in villages, towns and large cities will be set with reference to the new housing price index. Currently, HUG has been announcing the prices of new apartments in metropolitan cities by average square meter. But the practice had not been going as well as expected, with the prices of new apartments different by the 25 wards in Seoul and therefore, not much help to consumers.

HUG announced the average price of new apartments in Seoul by per square meter set at 6.25 million won, which comes to 20.63 million won per pyong (3.3 sq. meters). The per pyong price of a new apartment sold in Heukseok-dong, in Seoul last month amounted to 22.4 million won, higher by 2 million won than prices announced by HUG for the same area. 

The price difference for an apartment 85 sq. meters in size or 33 pyong came close to 60 million won. HUG has also been having trouble setting prices for rebuilt apartments in the three wards in Seoul, including Gangnam, Seocho and Songpa. The prices of the rebuilt apartments in those three wards have been going for around 40 million won per pyong (3.3 sq. meters) which is doubled the price announced by HUG for rebuilt apartments in those wards.

A view of the housing project which is being built with a guarantee by HUG.(Photos: HUG)

‘HUG Builds World of Abundance, Embracing Housing, Cities, and People’

On July 1 2015, the KHGC was officially reorganized as Korea Housing and Urban Guarantee Co. (HUG). Designated as the exclusive operator of National Housing and Urban Fund (NHUF), HUG has laid out a vision of becoming the backbone of housing and urban finance by supporting various government policy goals of urban regeneration, better housing conditions for all, etc. in addition to its original function of providing housing guarantees.

The KHGC, the former institution of HUG, had provided 739 trillion won worth of housing guarantees, serving 9.16 million households up until last year since its foundation in 1993. As the dedicated public housing guarantor, it paid out 8.5 trillion won in subrogation, protecting the property rights of people. Recognizing its capability for assessing the feasibility of a project for financing, KHGC was designated as the exclusive operator of NHUF last year, and was formally reorganized as HUG with the enforcement of NHUF ACT on July 1, 2015.

Its new name, HUG (Korea Housing & Urban Guarantee Corporation) implies that it will embrace housing, cities and people and expresses its determination that it will strive for Humanism, Understanding, and Growth. HUG is committed to promote urban regeneration by operating NHUF with its accumulated experience and know-how as the public housing guarantor. It plans to develop a successful financing model for urban regeneration projects and supporting guarantee projects as well as guarantees for small-scale redevelopment project of residential block.