Housing supply halved... Unsold units decrease for 3 consecutive months

May Housing Construction Supply and Unsold Inventory Status Announced
Nationwide Unsold Houses Decrease by 2,500 Units Compared to Previous Month
Pre-sale Volume Down 51.5% Year-on-Year

Last month, the nationwide unsold housing inventory also decreased. This marks the third consecutive month of decline in unsold housing nationwide. However, experts point out that this is a kind of optical illusion caused by a reduction in supply due to the real estate market downturn rather than a recovery in the housing sales market. In fact, the number of apartment units sold nationwide from January to May this year decreased by more than 51% compared to the previous year.

According to the ‘May Housing Statistics’ released by the Ministry of Land, Infrastructure and Transport on the 30th, as of the end of last month, the nationwide unsold housing units stood at 68,865, down 3.5% (2,500 units) from the previous month. The unsold inventory had been increasing for 11 consecutive months until February but turned to a decline starting in March.

By region, unsold housing in the metropolitan area (Seoul, Gyeonggi, Incheon) was 10,799 units, down 7.0% (810 units) from the previous month (11,609 units), while in the provinces, it was 58,066 units, down 2.8% (1,690 units) from the previous month (59,756 units).

However, considering the significant decrease in housing supply from January to May this year, it is difficult to attribute much meaning to the decline in unsold units from March to May. From January to May this year, a total of 46,670 apartment units were sold nationwide, a 51.5% decrease compared to the same period last year. In the metropolitan area, 28,554 units were sold, down 40.7%, and in the provinces, 18,116 units were sold, down 62.3%.

The total number of housing permits issued, covering all types of housing, also decreased by 24.6% year-on-year to 157,534 units, and housing starts dropped by 47.9% to 77,671 units.

The real estate market remains unstable. Although unsold units are decreasing, the number of problematic unsold units after completion is actually increasing. Post-completion unsold units rose by 2.0% (176 units) from 8,716 units in the previous month to 8,892 units.

The only positive aspect in last month’s housing statistics was a significant increase in sales transactions (based on reporting date), which rose 16.0% from the previous month to a total of 55,176 cases.