Kim, who is in his 30s and is about to move into a new apartment in Gyeonggi Province in the second half of this year, feels heartbroken whenever he hears news about apartment defects these days. It's because I'm worried about "Is our apartment going to be okay?" "I've been waiting for the day to move in with the dream of getting my own house, but if there is a serious defect in the new apartment, who would want to live?" Kim said. "What's happening these days doesn't seem to be a problem."
According to the construction industry on the 14th, the construction cost index reached 154 (100 as of 2015) in March this year, the highest ever. The combination of COVID-19, supply chains that have weakened worldwide due to the years-long Russia-Ukraine war, and high interest rates has led to a murderous increase in construction costs. It is pointed out that construction companies that have won orders before COVID-19 are completely unexpected factors, and the recent surge in defects has also played a part in this structural factor. On top of that, the tenant representative committee has become more sensitive to defects than in the past as it has jumped into public opinion campaigns through online communities to solve problems.
Recently, "Muan Hillstate Oryong," "Sejong Xi The City" and "Incheon Geomdan New Town Andante Apartment" are representative.
The construction industry cites "human risk" as the biggest problem with construction sites these days. Building a building involves human touch from the initial stage to the final stage, and finding skilled technicians has become a "starter in the sky" at current construction sites in Korea.
Steelworkers lift, fix, and build skeletons of dozens of kilograms of steel bars, but everyone avoids them because it is the most difficult task, said an executive in the domestic construction industry. "There were experienced Korean-Chinese in the past, but low-skilled foreign workers are taking over the positions that left during COVID-19."
Another executive of the construction industry said, "The average proportion of foreign workers at construction sites these days is about 30%, but in some places, the ratio is close to 60%." As a result, it has become common for communication to be difficult at construction sites where instructions and implementations are required.
The situation in which construction was repeatedly suspended and resumed during the COVID-19 period is also considered a factor in the surge. The suspension of construction is directly linked to an increase in costs. In particular, in the case of apartments, the pressure was increased because the expected date of occupancy was set.
An official from the construction industry said, "If we fail to meet the scheduled date of moving in, we have to pay as delayed prize money," adding, "Work has been suspended in hot and cold seasons due to climate change over the past few years, and the construction site suffered during the strike of the cargo alliance two years ago."
As consumers have recently carefully examined quality, post-production such as flooring, painting, and electrical equipment is becoming more important. Although high-quality domestic manpower is flocking, the problem is that the manpower is limited and labor costs soar. An official from the construction industry said, "The daily wage of floor workers soared to 800,000 won last year," adding, "Some even said that they would rather have my children learn from this salary."
The long slump in the real estate market is also the main reason for the problem. When the real estate market was good, it was natural for house prices to rise at the time of paying the balance, but the market price often falls below the sale price ahead of the recent move-in. An official from the sales industry said, "If the dispute is prolonged, the approval of completion of construction may be delayed," adding, "The market is so bad these days that the psychology is to delay moving in and play with the construction company."
If the move-in is delayed by three months from the scheduled date due to the apparent negligence of the developer or contractor, the contractors can cancel the contract and receive a penalty.
It is also worth paying attention to the argument that strengthening supervision responsibility is institutionally necessary. According to the industry, if an apartment with 300 to 500 households is supervised, the remuneration of the supervision company is around 2 billion won. It literally means that you have to pay for the money by supervising the occurrence of defects.
Meanwhile, according to the Ministry of Land, Infrastructure and Transport, from January 2019 to February this year, more than 4,300 cases of defect disputes were handled annually. In 2019 alone, "cracks" were the most common among defect types (based on a single item), followed by dysfunction (13.3%) and contamination and discoloration (10.4%). On the other hand, these three items shrank to less than 5% in 2023. Four categories of ground subsidence, tree death, noise, and odor classified as "other" surged from 22.7% in 2019 to 79.5% last year.
