Transaction Drought Deepens... June Housing Sales Volume Down 38.5% Year-on-Year

Housing Sales Transactions in June Reach 89,000, Jeonse and Monthly Rent Transactions Total 201,000
171,630 Apartment Units Nationwide Scheduled for Occupancy in Second Half of This Year (July-December)

[Asia Economy Reporter Kangwook Cho] Last month, the nationwide housing sales transaction volume sharply declined by more than 30%, indicating a deepening drought in transactions.

According to the Ministry of Land, Infrastructure and Transport on the 30th, the total housing sales transactions last month amounted to 88,922, down 8.8% from the previous month and 35.8% compared to the same month last year.

The cumulative housing sales transactions from January to June this year totaled 559,323, a 9.9% decrease compared to the same period last year.

Last month, housing transactions in the metropolitan area decreased by 11.3% compared to the previous month and by 44.4% compared to one year ago. Transactions in provincial areas totaled 46,906, down 6.4% and 25.6% respectively during the same period.

Housing transactions in Seoul were 11,721 in June, down 10.8% from the previous month and 39.8% from the same month last year.

On a cumulative basis through June, the metropolitan area (278,340 transactions) decreased by 18.0% year-on-year, and provincial areas (280,983 transactions) decreased by 0.1%. Seoul recorded 72,843 transactions, down 18.1% during the same period.

By housing type, apartment transactions in June were 57,861, down 43.5% compared to the same month last year, while non-apartment housing transactions were 31,061, down 13.9%. On a cumulative basis through June, apartment transactions (373,014) decreased by 17.5% year-on-year, whereas non-apartment housing (186,309) increased by 10.4%.

Combining lease reporting system data and fixed-date registration data, last month’s total jeonse and wolse (monthly rent) transactions amounted to 200,547, up 15.5% from the previous month and 6.8% from one year ago. Also, cumulative jeonse and wolse transactions through June (1,158,889) increased by 2.9% compared to the same period last year (1,126,261).

The metropolitan area (138,679 transactions) increased by 7.1% compared to the same month last year, and provincial areas (61,871 transactions) increased by 6.2%.

Apartment transactions (92,689) rose 7.0% year-on-year, and non-apartment housing (107,858) increased by 6.6%.

By lease type, jeonse transactions (115,648) and wolse transactions (84,899) increased by 6.6% and 7.1%, respectively, compared to one year ago.

The nationwide apartments scheduled for move-in during the second half of this year (July to December) are estimated at 171,630 units (metropolitan area 96,332 units, Seoul 17,569 units).

The metropolitan area’s 96,332 units represent a 21.0% increase compared to the 10-year average from 2011 to 2020 (80,000 units), but a 5.4% and 2.9% decrease compared to the recent 5-year average (102,000 units) and the same period last year (99,000 units), respectively.

By housing size, units under 60㎡ total 69,711, units between 60 and 85㎡ total 86,019, and units over 85㎡ total 15,900, with small and medium-sized housing under 85㎡ accounting for 90.7% of the total, indicating a large volume of small and medium-sized housing supply. By sector, private housing accounts for 123,209 units, and public housing for 48,421 units.

Including the second half supply, the total apartment move-ins nationwide for this year as of July are 319,000 units, with 183,000 units in the metropolitan area and 41,000 units in Seoul.

Compared to the recent 10-year average (nationwide 317,000 units, metropolitan area 148,000 units, Seoul 37,000 units), this represents an increase of 0.5% nationwide, 23.4% in the metropolitan area, and 9.9% in Seoul.

However, compared to the recent 5-year average, when move-in volumes had sharply increased (nationwide 393,000 units, metropolitan area 189,000 units, Seoul 42,000 units), this is a decrease of 18.9% nationwide, 3.1% in the metropolitan area, and 3.0% in Seoul.