Gwangju and Daejeon May Face Shortage of New Apartments Within Years... 65% Decrease in Supply of Move-in Units

[Asia Economy Reporter Cha Wanyong] While the volume of new apartment move-ins this year is expected to remain similar to last year, the supply in some major provincial cities such as Gwangju and Daejeon is projected to decrease significantly.

According to Real Estate R114 on the 23rd, a total of 356,704 households nationwide are scheduled to move in this year. By region, Gyeonggi-do has the largest volume with 113,692 households planned, followed by Incheon (45,169 households), Daegu (36,059 households), Chungnam (26,701 households), and Seoul (26,079 households).

The region with the smallest volume is Jeju-do, with 1,135 households planned, and Sejong, Daejeon, and Gwangju also have fewer than 5,000 households scheduled for move-in.

In terms of growth rate, Gwangju and Daejeon show the largest decreases compared to last year, each with about -65%. In Gwangju, the number dropped from 13,716 households last year to 4,750 this year, a decrease of about 9,000 households, while Daejeon fell from 9,863 to 3,370 households, a decrease of about 6,000 households. Gwangju recorded its lowest level in 11 years, and Daejeon in 14 years.

Some voices suggest that a shortage of new apartments may occur within a few years, especially in regions like Gwangju where supply has sharply decreased. In particular, new pre-sale volumes this year are expected to drop by about 30% compared to last year, which could accelerate the supply drought phenomenon.

Kwon Il, head of the research team at Real Estate Info, said, “Although the total move-in volume has not decreased significantly due to complexes sold during the boom years in recent years, the number of move-ins will start to decline rapidly as pre-sale volumes decrease. It may be difficult at first, but if supply decreases and interest rates return to normal levels, the real estate market is likely to normalize.”

Meanwhile, new pre-sales are planned in regions expected to experience supply droughts.

In Gwangju, where move-in volumes are expected to decrease significantly this year, Hoban Construction plans to pre-sell ‘We Park Mareuk Park’ in March. It consists of medium to large-sized units ranging from 84 to 135㎡, with a total of 917 households across 15 buildings.

In Jeonbuk, ‘Jeongeup Prugio The First’ and the privately participated public pre-sale apartment ‘Iksan Busong Desiang’ will be supplied in March, with 707 and 745 households respectively.

In Daejeon, ‘Gayang-dong Dow Gallery Hurium’ with units ranging from 59 to 78㎡ totaling 224 households will be available in March, and in Busan, POSCO Construction plans to pre-sell 824 households ranging from 59 to 84㎡ through the Dangri Seunghak regional housing association project in April.