Seoul Tied Up by Reconstruction and Redevelopment... Apartment Sales Hit Record Low This Year

Over 3,300 Households Expected to Be Sold This Year... Lowest in 10 Years
Impact of Delays Due to Price Ceiling System and Other Factors

This year, the supply of apartment units for sale in Seoul is expected to hit an all-time low. This is attributed to the fact that most of the new supply in Seoul, consisting of reconstruction and redevelopment projects, has not entered the market due to issues such as pricing.

According to Real Today, a real estate research firm, the total number of apartments for sale in Seoul this year (based on general sales, with December figures being planned) is 3,275 units. This is about half the number supplied in 2010, which was 6,334 units.

Excluding this year, 2010 was the year with the lowest apartment supply in Seoul. This was largely due to the government supplying affordable housing below market prices, which led private construction companies to reduce sales out of concern for unsold units.

In 2011, 13,899 units were supplied, and in 2012, amid the global financial crisis and real estate downturn, 6,364 units were sold. Subsequently, the annual supply was over 10,000 units except for 2018, with ▲18,232 units in 2013 ▲13,390 units in 2014 ▲15,015 units in 2015 ▲15,514 units in 2016 ▲18,690 units in 2017 ▲9,627 units in 2018 ▲15,051 units in 2019 ▲11,702 units in 2020.

Up to this month, 2,554 units have been sold, including 'ePyeonhansesang Gangil Urban Bridge' and 'Raemian One Bailey.' Even when adding four planned December sales such as 'Bukseoul Xi Polaris,' the total only reaches 3,275 units.

The reduction in supply in Seoul is analyzed to be due to a decrease in reconstruction and redevelopment project units. Since there is almost no vacant land in Seoul, most supply must come from reconstruction and redevelopment projects. However, conflicts over pricing between the government and associations under the private land price ceiling system have delayed sales schedules.

Projects originally scheduled for sale this year, such as 'Imun 1 District' in Dongdaemun-gu and 'Jamsil Jinju (819 units)' in Songpa-gu, have postponed their schedules to the first and second halves of next year due to pricing issues. Additionally, 'Dunchon Olympic Park Avenue Foret' in Gangdong-gu, known as the largest reconstruction project since the founding of Korea, has also delayed its sales to next year due to pricing negotiations and internal conflicts within the association.

As the number of units for sale decreases, competition for subscription is soaring. The first-priority subscription competition rate for Seoul apartments this year is 162.9 to 1, nearly double last year's 89.8 to 1.

A balloon effect is also occurring, with subscription demand shifting to metropolitan area complexes with good access to Seoul. This year, the first-priority subscription competition rates for apartments in Gyeonggi and Incheon were 28.1 to 1 and 18.4 to 1, respectively. Although not as high as last year (Gyeonggi 30.2 to 1, Incheon 29.6 to 1), these figures far exceed those of 2019 (Gyeonggi 11.9 to 1, Incheon 8.3 to 1).

A Real Today official said, "Many projects in Seoul were delayed this year due to conflicts related to pricing. As supply decreases, subscription competition rates in Seoul are rising year by year, and demand is spreading to complexes in Gyeonggi and Incheon with good access to Seoul, supported by transportation developments such as GTX."