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Rationalization plan for pre-sale restrictions due to penalty points

Publication Date 2022-11-10

Researchers Young-Deok Kim, Hwa-Rang Kim

● In September 2020, in the penalty point system under the 「Construction Technology Promotion Act」, an amendment was promoted to change the penalty point calculation method from cumulative average to cumulative summation, and was applied in earnest on January 1, 2023. As a result, there is great concern about the excessive expansion of pre-sale restrictions, which have a relatively large impact among disadvantages, especially in the construction industry. - As the number of construction companies subject to pre-sale restrictions under the 「Housing Act」 is greatly increased due to the change in the penalty point calculation method, difficulties in the overall housing business are expected to increase, and medium-sized and small construction companies that do not have sufficient funds are virtually forced out of the market. Concerns about getting hit are growing. - Fundamentally, restrictions on pre-sale not only deviate from the operating purpose of the penalty point system, but also limiting private sector sales and production activities of construction companies can be said to be excessive sanctions. ● In addition, in housing supply, an excessive increase in the number of objects subject to pre-sale purchase restrictions due to penalty points may result in a decrease in housing supply and, furthermore, accelerate the introduction of the post-sale system in the market, which should be preceded by establishing a sufficient institutional basis in housing policy. . ● In this study, if the current cumulative average method is changed to the cumulative sum method, the number of construction companies subject to pre-sale restrictions will increase significantly from 158 to 265 based on the current standard. In particular, 40 companies (60%) among the 66 companies that received penalty points within the top 100 of the construction capability evaluation ranking were included, and large and medium-sized construction companies with a large supply of housing were included in the pre-sale restrictions. - First, in order to mitigate excessive housing market impact, establish quality and safety management activities, and secure sufficient response time to the reduction standards, a plan to postpone the implementation period for one or two years can be reviewed. - Second, it is judged that the reduction standard can be expanded to encourage construction companies to reduce the penalty points in accordance with the purpose and purpose of operating the penalty point system. It is necessary to establish new reduction standards such as performance, safety management activities, and green building related certification. - Third, if it is difficult to exclude pre-sale restrictions from disadvantages, it is possible to consider raising the penalty points as a way to mitigate the increase in companies subject to pre-sale restrictions by changing the calculation of penalty points to a cumulative sum method. In fact, as a result of simulation in this study, it was found that the range of increase is alleviated when the minimum standard score subject to the current pre-sale restriction is raised from 1 point to 3 points or more. - Fourth, taking into account the inconsistency with the purpose of operating the penalty point system, disruptions in housing supply, and the impact on the housing construction industry and even the construction industry, it can be considered first to exclude the pre-sale restriction from the disadvantages of the penalty point system. In addition, for pre-sale restrictions, a plan to maintain the existing cumulative average method may be reviewed. - Fifth, it is necessary to consider applying only the penalty points imposed in the process of promoting the housing construction project as the disadvantage of the restriction on pre-sale.