Ministry of Land, Infrastructure and Transport Announces Plan to Improve Public Offering Price Calculation System

The Ministry of Land, Infrastructure and Transport has announced a plan to improve the public offering price calculation system, which aims to increase the credibility of the public offering price by allowing it to fluctuate at a level similar to the change in market value.

The current method of calculating the public offering price will be changed from the current method of increasing the market price reflection rate every year to a method that faithfully reflects market changes in line with public perception.

The revised public offering price calculation method will multiply the market price by the market fluctuation rate plus 1 and then the public price of the previous year. This change is expected to minimize the occurrence of the phenomenon of the public offering price reversing the actual transaction price.

Improvement Plan for Calculating Public Offering Price

The improvement plan includes the following steps:

• Evaluate the balance level of each city, county, and district unit.
• Select areas that fall short of the balance evaluation criteria as areas for in-depth review.
• Measure the COD (Coefficient of Dispersion) of the public price estimated by the investigator to select areas requiring homogeneity improvement.
• Measure the PRD (Price Ratio Dispersion) of the public price estimated by the investigator to select areas requiring fairness improvement by price range.
• Analyze the ratio of actual transaction price, automatic calculation model price, and public price to select areas with excessive or insufficient evaluation levels.

Reassessment of Public Announcement Prices

The public announcement prices of real estate with low imbalance, selected based on the selected in-depth review areas, will be reassessed through deliberation by the Central Real Estate Price Public Announcement Committee to improve the imbalance.

An external expert, such as a university professor or a real estate appraiser who did not participate in the public announcement, will conduct a final review of the real estate agent’s review opinion, and the Ministry of Land, Infrastructure and Transport will finalize the public announcement price inspection plan.