Housing Sales Volume from January to August Halved Compared to Last Year... Apartment Sales Decline Even More

On the 19th, the government decided to lower the jeonse-to-monthly rent conversion rate from the existing 4% to around 2.5%. Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, stated at the meeting of ministers in charge of real estate market inspection that the current 4% conversion rate could accelerate the trend toward monthly rent and increase the burden on tenants, leading to this decision. The photo shows a real estate agency in Jamsil, Seoul on the same day. Photo by Moon Honam munonam@

Due to factors such as interest rate hikes and concerns over falling house prices, the real estate market is moving from a transaction disappearance situation to a transaction extinction. The decrease in transaction volume is greater in the metropolitan area than in the provinces, and unsold houses are accumulating nationwide.

◆380,000 Housing Transactions Nationwide from January to August... Half Compared to 730,000 Last Year

According to the Ministry of Land, Infrastructure and Transport on the 30th, the total number of housing sales nationwide from January to August this year was 385,391, a 47.7% decrease compared to the same period last year (737,317).

By region, the metropolitan area recorded 130,883 transactions, down 57.3% year-on-year, while the provinces had 230,943 transactions, down 38.5%. The decrease was larger in the metropolitan area. Among the metropolitan areas, Seoul recorded 43,818 transactions, down 53.8%.

By type, apartment transactions from January to August this year were 225,486, down 54.3% year-on-year, while non-apartment housing (159,905) decreased by 34.4%.

Source: Ministry of Land, Infrastructure and Transport

Looking at August statistics alone, the total number of housing sales nationwide was 35,531, down 60.1% year-on-year and 10.3% compared to the previous month. The metropolitan area (13,883) decreased by 66.7% year-on-year, and the provinces (21,648) decreased by 54.3%.

As the transaction cliff deepens, unsold houses are also increasing.

As of the end of August, the total number of unsold houses nationwide was 32,722, an increase of 4.6% (1,438 units) compared to the previous month.

Unsold houses hit a bottom of about 14,000 units in October-November last year and have been increasing every month since the beginning of this year.

The number of unsold houses in the metropolitan area was 5,012, up 10.7% (483 units) from the previous month. In the provinces, the number increased by 3.6% (955 units) from 26,755 to 27,710 during the same period.

'Post-completion unsold houses,' which are called 'malignant unsold houses' because they remain unsold even after construction is completed, totaled 7,330 nationwide, down 0.8% (58 units) from the previous month.

◆No Sales, Only Jeonse and Monthly Rent Transactions... Surpassing 2 Million from January to August

Unlike the declining sales market, the volume of Jeonse (long-term deposit lease) and monthly rent transactions slightly increased.

The total number of Jeonse and monthly rent transactions from January to August (based on reporting date), combining lease reporting system data and fixed-date reporting data, was 2,008,960, an increase of 27.7% compared to the same period last year.

The proportion of monthly rent in Jeonse and monthly rent transactions was 51.6%, up 9.0 percentage points (p) from 42.6% in the same month last year.

◆Permits Increase but Construction Does Not... Housing Starts Plummet

The number of housing permits nationwide from January to August was 347,458, an 11.1% increase compared to the same period last year.

In the metropolitan area, permits were 129,296, down 20.7% year-on-year, while in the provinces, permits increased by 45.6% to 218,162. Looking at Seoul alone, permits decreased by 38.7% to 31,055.

By housing type, apartments accounted for 282,810, up 21.4% year-on-year, while non-apartment housing was 64,648, down 19.2%.

The scale of housing starts nationwide from January to August was 261,193, down 24.9%. By region, the metropolitan area recorded 131,123 starts, down 23.8% year-on-year, and the provinces recorded 130,070, down 26.0%.

Apartment starts were 199,279, down 23.0%, and non-apartment housing (61,914) decreased by 30.5%.

As of August, the number of apartment supply (approval) units nationwide was 163,714, down 18.7% year-on-year.

The metropolitan area recorded 73,072 units, down 21.1%, and the provinces recorded 90,642 units, down 16.5%.

By type, general supply was 131,550 units, down 12.3% year-on-year, rental housing was 12,135 units, down 56.1%, and cooperative members' units decreased by 15.6% to 20,029.

Housing completions (move-ins) nationwide totaled 258,669, up 6.2% year-on-year.

By region, the metropolitan area recorded 144,530 units, down 3.1%, while the provinces recorded 114,139 units, up 20.8%.

By type, apartments increased by 9.5% year-on-year to 197,919 units, while non-apartment housing decreased by 3.3% to 60,750 units.