President Lee Chae-kwang of the Korea Housing and Urban Guarantee Corp.(HUG). (Photo: HUG)

If a cap on housing sale prices is imposed starting October, newly built apartments in the Seoul area are predicted to fetch nearly half of market prices.

Differences between market prices and new apartment selling prices at some apartments in the Gangnam area, south of the Han River, will likely go up to as much as 1.5 billion won, real estate market analysts said.

A simulation survey on some apartments in the Seoul area subject to the imposition of a cap on housing sale prices, conducted by the Ministry of Land, Infrastructure and Transport (MOLIT), and released on Aug. 12, showed that the average apartment sale price is forecast to drop to levels between 70 percent and 80 percent of market prices of neighboring apartments. But the ministry did not disclose detailed figures.

Among newly built apartments expected to bring about windfalls to apartment lottery winners are the 2nd Sangah complex in Samseong-dong, the third Hukseok district complex in Dongjak-gu.

The above apartments are where occupants have moved out or are to be torn down for reconstruction.

In the Seoul area, 66 apartment complexes are to be torn down and occupants are to be relocated for reconstruction and redevelopment.

The cap on apartment sale prices, taking effect in October, will likely force more contractors to advance their apartment sale lottery schedule before the month.

The ministry plans to readjust new apartment sale prices to lower levels compared to those set by the Korea Housing & Urban Guarantee Corp.

To this end, the ministry plans to get housing sale price screening committees of local governments ramp up scrutiny and have the Korea Appraisal Board (KAB) review proper housing sale prices.

The ministry plans to rationalize housing lot assessment price guidelines by revising regulations on the evaluation of housing complex sale prices.

As such, chances are high that sale prices of newly built apartments such as the Raemian One Bailey Apartments (reconstruction of the 3rd Hanshin/Gyeongnam Apartments in Seocho-gu) will likely plunge to half of current prices of neighborhood apartments.

Sale prices of Dunchon LH apartments are to be set at 26 million won per 3.3 sq. meters as demanded by HUG. The figure represents levels, an equivalent to 55.6 percent of current market prices.

If One Bailey Apartments are subject to a cap of a cap on housing sale prices, the difference between their sale prices and market prices are forecast to soar to as much as 1.5 billion won for a 114 sq. meter unit, real estate experts said.

Park Won-gap, a senior real estate researcher with KB, said apartment construction sites in the Gangnam area will be better off if they are subject to levels suggested by HUG rather than the imposition of the cap on apartment sale prices.

Apartments in the Gangnam area surpassing 900 million won in sale prices are most likely to be purchased by cash-rich people since they are subject to strict restrictions on borrowing money from commercial banks for mid-term apartment sale price payments.