In Seoul, according to reporter Park Ji-hye from News1, the average nationwide apartment sale price exceeded 30 million KRW per 3.3 square meters (1 pyeong) for the first time last month. Based on data from Real Estate R114, the national average apartment sale price was recorded at 31.2 million KRW per 3.3 square meters last month. This marks the first instance that the average price per 3.3 square meters surpassed 30 million KRW, increasing more than 6 million KRW from the previous high of 24.74 million KRW in August of last year. The photo shows an apartment complex as seen from Namsan, Seoul.
From the end of this month, the Zero Energy Building (ZEB) standard will become mandatory for private apartments. Although this could lead to reduced greenhouse gas emissions and lower energy costs per household, it is expected that private apartment prices will rise due to the additional construction costs needed to meet the fifth-grade level of energy performance.
The Ministry of Land, Infrastructure and Transport announced on the 18th that it would revise the construction standards for energy-saving eco-friendly housing and implement them from the 30th to realize energy consumption reduction and carbon neutrality in multi-family housing.
Under the amendments, private developers must meet the fifth-grade ZEB level of energy performance by choosing between energy performance standards or specification standards for new apartment buildings.
The performance standard aiming for final energy savings requires lowering energy usage to less than 100 kWh/㎡yr, an improvement of approximately 16.7% from the previous standard (less than 120 kWh/㎡yr). For reference, 1 kWh/㎡yr is the energy used by 1 square meter of building space in a year: about 15 hours of refrigerator use, 5-8 hours of LED TV, or 40-90 minutes of air conditioning.
Specification standards define materials and methods, such as upgrading insulation and airtight performance of windows from grade 2 to grade 1, and reducing lighting density per unit area from 8W/㎡ to 6W/㎡. The renewable energy design score increases from 25 to 50 points, and the installation of energy recovery ventilators for ventilation will be mandatory.
Additional construction costs due to upgrades in material grades are unavoidable, leading to higher sale prices. According to the Korea Institute of Construction Technology, the construction cost index—which was 100 in 2020—increased to 131.11 by March of this year. Monthly peak indices from 2021 to 2024 show a steady upward trend: 117.37 in 2021, 125.70 in 2022, 139.34 in 2023, and 130.39 in 2024.
Consequently, sale prices of private apartments are rising sharply. According to the Housing and Urban Guarantee Corporation (HUG), the average private apartment sale price nationwide over the past year was about 19 million KRW per 3.3 square meters as of the end of May. In Seoul, the price per pyeong is 45.68 million KRW, an increase of over 18% compared to the same month last year.
The public sector already mandated using less than 90 kWh/㎡yr for energy since 2023 under the ZEB 5-level certification requirement. Based on the analysis of Korean Land and Housing Corporation (LH) multi-family housing construction cases, an additional construction cost of around 1.3 million KRW per 84㎡ unit is estimated.
One construction industry insider stated, “Meeting the standards will inevitably increase material costs, labor costs, and R&D costs,” adding, “Mandatory zero energy won’t drastically increase sale prices on its own, but the government is adding another factor to already rising prices.”
Another source added, “Even if buildings are environmentally friendly, they’re meaningless if they don’t sell in the market, so we plan to aim for cost minimization to keep sale price increases due to the zero energy requirement minimal,” suggesting that government subsidies might be necessary in light of consumer resistance to high prices and official criticism of high sale prices.
The government believes that mandatory zero energy compliance can reduce the burden on buyers in the long term. The Ministry of Land estimates that energy-efficient multi-family housing under the revised law could cut annual energy costs per household by about 220,000 KRW, asserting that while additional construction costs are unavoidable, long-term energy savings can alleviate maintenance costs for residents.
Kim Hun-jung, housing policy director at the Ministry of Land, said, “Improving energy performance in private multi-family housing is expected to support national efforts to reduce greenhouse gas emissions for carbon neutrality,” emphasizing continual R&D for zero-energy housing technologies and exploring ways to lower regulatory burdens for small-scale complexes.