President Kim Sun-kyu of the Korea Housing 

Guarantee Corp. (photo  courtesy of KHGC)

    The Korea Housing Guarantee Corp. has gotten into the residential housing sales business by opening a model house on May 10 in the “CG Hanshin HuPlus” housing project near Sawol Station on Subway Line 2 in Daegu, reports said recently.

It is the first time in 20 years that a housing guarantee firm, which guarantees the buyer’s contract money and mid-term payment when a housing builder goes bankrupt, has taken up the role of selling the newly built houses by itself, reports said.

The housing complex has 510 newly-built housing units with sizes ranging from 84-134 square meters in space built by C and Woobang Construction and managed by Sungmun International and sold under the name “CG Woobang Yucell No. 1.”

With C and Woobang going belly-up in 2008, the Housing Guarantee Corp. took over the management of the building company and started to sell the houses. The residences were 70.8 percent completed then.

But the Housing Guarantee Corp. had trouble selling the houses due to the economic slowdown and, consequently, had to step in and complete the construction and sell the new houses.

In February, Hanshin Kongyoung was selected to complete the construction of the housing project, but the question is how the Housing Guarantee Corp. will make a profit. The corporation estimates that it will end up with a loss from the sale of the new houses with the added cost of the construction of around 53 billion won and 80 billion won already returned to buyers in 2008, among other expenses.

An official of the supervisory team for the project for Korea Housing Guarantee Corp., said the corporation’s direct assumption of the project for its completion has reduced the amount of possible loss to the company by 18 billion won.

The fact that stands out in the corpo-ration’s direct takeover of the project has been that the prices of the houses it has been selling have been cheaper than those charged by construction firms and other civilian undertakers. The corporation charges 6 million won per 3.3 square meters (1 pyeong), which is almost 1 million won lower than the price charged by construction firms or private undertakers, officials noted. The more common retail price is from 6.7 million won to 6.9 million won per pyeong for a site with total land space of 85 square meters and 6 million won per pyeong for a site with 134 square meters in total space.

The residents who bought units from the Korea Housing Guarantee Corp. will have to pay from 200 million won to 300 million won and will be scheduled to be moved into those apartments in December as well as be entitled to the special tax exemptions that the government announced on April 1.