75,000 Unsold Houses in January... Largest in 10 Years

Growth Slows... Below 10,000 Households for the First Time in Three Months
January Housing Sales Down 38% Year-on-Year
Jeonse and Wolse Transactions Increase by 5%

Last month, the nationwide unsold housing inventory reached 75,359 units, surpassing 70,000 units for the first time since 2012. This is attributed to a significant increase in supply due to construction companies pushing out inventory ahead of the year-end in the third and fourth quarters of last year, combined with a cooling housing market caused by interest rate hikes. However, the increase in unsold units has somewhat eased due to the government's relaxation of sales-related regulations through the 1·3 measures.

According to the Ministry of Land, Infrastructure and Transport on the 28th, as of the end of January, the nationwide unsold housing inventory was counted at 75,359 units, which is a 10.6% (7,211 units) increase compared to the previous month (68,148 units). The January unsold housing inventory is the highest in 10 years and 2 months since November 2012, when it was 76,319 units.

The volume of unsold housing has been rapidly accumulating since the end of last year. Until June last year, unsold housing units did not exceed 30,000, but after interest rate hikes became more pronounced in the second half of the year, the number surged to 58,027 units in November and then surpassed 60,000 for the first time in December with 68,148 units.

By region, the increase in volume was greater in the Seoul metropolitan area than in other provinces. The metropolitan area recorded 12,257 units, a 10.7% (1,181 units) increase from the previous month (11,076 units), while provinces had 63,102 units, a 10.6% (6,030 units) increase from the previous month (57,073 units). The government classifies post-construction unsold units as malignant unsold housing, which totaled 7,546 units, a 0.4% (28 units) increase from the previous month’s 7,518 units.

However, the increase in unsold units has somewhat eased as the government relaxed many sales-related regulations through the 1·3 measures. While the number of unsold units increased by more than 10,000 units for two consecutive months in November and December last year, the increase in January was below 10,000 units.

The number of housing sales in January was 25,761 transactions, a 38.2% decrease compared to the same month last year (41,709 transactions). Compared to the previous month (28,603 transactions), it decreased by 9.9%. Sales in the metropolitan area were 10,299 transactions, down 7.4% from the previous month and 36.5% from the same month last year, while provinces recorded 15,462 transactions, down 11.5% from the previous month and 39.4% from the same month last year.

By type, apartment transactions were 17,841, down 27.1% compared to the same month last year, and non-apartment transactions were 7,920, down 54.1% year-on-year.

Lease transactions increased. This is analyzed as a shift from purchase demand to rental demand. The combined January lease transaction volume, including lease reporting system data and fixed-date reporting data, was 214,798 transactions, a 5.0% increase compared to the same month last year. By transaction type, monthly rent transactions accounted for 54.6% of the total, increasing by 9.0 percentage points compared to the same month last year.

Due to the burden of unsold housing and the housing market downturn, housing permits and construction starts decreased. In January, nationwide housing permits totaled 21,425 units, a 45.9% decrease compared to the same period last year (39,614 units). During the same period, nationwide housing construction starts were 15,612 units, down 17.2% from the same period last year (18,848 units). Similarly, as concerns about unsold housing increased and complexes postponed sales, the number of apartment sales in January sharply dropped to 1,852 units nationwide, a 90.7% plunge compared to the same period last year (19,847 units).