Unsold Housing Units Up 13.5% in One Month... Highest Since December 2019
Housing Sales Volume from January to October Halved Compared to Previous Year
The phenomenon of a 'transaction cliff' in the housing market has intensified, with unsold homes increasing in October as well. The photo shows apartments and residential areas in Seoul as seen from Inwangsan Mountain. [Image source=Yonhap News]
[Asia Economy Reporter Cha Wanyong] The housing market transaction freeze continued in October. Nationwide unsold housing units reached the highest level since December 2019, and housing sales volume dropped by more than half compared to the same period last year.
According to the October housing statistics released by the Ministry of Land, Infrastructure and Transport on the 30th, the accumulation rate of unsold apartments nationwide is accelerating. Despite an increasing number of sites offering 'discounted sales' across the country, the rising trend of unsold units continues, indicating a severe slump in the sales market.
As of the end of October, the total number of unsold houses nationwide was 47,217 units, an increase of 13.5% (5,613 units) compared to the previous month (41,604 units).
The metropolitan area recorded 7,612 units (Seoul 866 units, Gyeonggi 5,080 units, Incheon 1,666 units, etc.), a 2.6% decrease from the previous month’s 7,813 units, while the provinces saw 39,605 units, up 17.2% (5,814 units) from the previous month (33,791 units).
Post-completion unsold units were 7,077, down 1.6% (112 units) from the previous month (7,189 units). However, since reporting unsold units is not mandatory for developers, the actual number of 'hidden' unsold units is likely much higher than the disclosed statistics.
The housing sales market continues to face a deep freeze. The number of housing sales transactions in October (based on reporting date) totaled 32,173 cases. This represents a 0.7% decrease from the previous month (32,403 cases) and a 57.3% decrease compared to the same month last year (75,290 cases).
The cumulative total up to October this year was 449,967 cases, which is only 49.7% of the 894,238 cases recorded in the same period last year.
In the metropolitan area (12,102 cases), transactions decreased by 4.0% from the previous month and by 62.2% compared to the same month last year. In the provinces (20,071 cases), transactions increased by 1.4% from the previous month but remained at 53.7% compared to the same month last year. For the January to October cumulative total, the metropolitan area (179,159 cases) decreased by 58.5% and the provinces (270,808 cases) decreased by 41.5% compared to the same period last year.
Among nationwide lease transactions last month (204,403 cases), monthly rent transactions accounted for 105,940 cases, and Jeonse (key money deposit) transactions accounted for 98,463 cases. Based on cumulative data up to October this year, the proportion of monthly rent transactions among nationwide lease transactions was 51.8%, down 8.7 percentage points from 43.1% in the same month last year.
Meanwhile, housing construction performance is still struggling due to the real estate market slump. While nationwide housing permits are increasing, housing starts and sales volumes have decreased. It is analyzed that developers are postponing projects as the real estate market worsens.
The cumulative housing permit performance up to October was 428,318 units nationwide, a 5.6% increase compared to the same period last year (405,704 units). On the other hand, housing starts totaled 330,097 units nationwide, a 26.6% decrease compared to the same period last year (451,134 units), and sales performance also decreased by 12.2% to 223,745 units nationwide compared to the same period last year (254,779 units).
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