Malignant Unsold Housing Units Increase for 8 Consecutive Months... Housing Transactions Also Rise for 3 Months Straight

Since the end of last year, the nationwide increase in unsold housing units has slightly decreased as of last month. As construction companies have refrained from new sales citing the real estate market downturn, the rise in unsold units appears to have slowed. The so-called "post-completion unsold housing," classified as problematic, has increased for eight consecutive months, surpassing 12,000 units. Although the housing supply leading indicators?permits and construction starts?improved compared to the previous month, they still remain below the levels seen in previous years.

Apartment complex in Seoul city / Photo by Yonhap News

According to the "March Housing Statistics" released by the Ministry of Land, Infrastructure and Transport on the 30th, the nationwide unsold housing units last month totaled 64,964, a 0.1% (90 units) increase from the previous month (64,874 units). The number of unsold units has been rising for four consecutive months since December last year. However, the rate of increase has slowed from 7.9% to 2.0%, then 1.8%, and finally 0.1%.

In the Seoul metropolitan area, unsold housing units numbered 11,977, a 0.2% (21 units) increase from the previous month. Seoul (-4.9%) and Incheon (-6.1%) saw decreases, but Gyeonggi (8,095 units → 8,340 units) increased by 3.0%. During the same period, the provinces saw a 0.1% (69 units) increase to 52,987 units, accounting for 81.6% of all unsold housing units nationwide. Notably, Gwangju showed a significant increase (904 units → 1,286 units, 42.3%). Daegu had 9,814 unsold units, still the highest nationwide, but decreased by 113 units in one month. Gyeongbuk followed with 9,561 units.

Nationwide post-completion unsold housing units reached 12,194 last month, a 2.8% (327 units) increase from the previous month. Although the proportion of increase declined compared to the previous month (4.4%), the total number of units has been rising for eight consecutive months since August last year. In Seoul, the number exceeded 500 units for the first time in 9 years and 6 months in February but decreased to 490 units last month. In the provinces, the number increased by 3.7% (351 units) from 9,582 to 9,933 units.

The sharp slowdown in the increase of unsold units is largely attributed to the reduction in housing sales following the overhaul of the Korea Real Estate Board's subscription home system. Last month, sales approvals dropped by 89.4% from the previous month to 2,764 units. The Seoul metropolitan area and provinces saw steep declines of 93.4% and 86.0%, respectively. On a cumulative basis, the total was 42,688 units, a 76.3% increase compared to the same period last year.

Leading indicators of housing supply showed slight improvement. Last month, housing permits totaled 25,836 units, a 12.8% increase from the previous month. The Seoul metropolitan area (10,423 units) and provinces (15,413 units) increased by 16.9% and 10.1%, respectively. Housing starts were 11,290 units, a 1.8% increase from the previous month (11,094 units). However, due to the halving of performance in February, the cumulative total is 20.6% lower than the previous year.

Housing transaction volume increased for the third consecutive month. In March, housing sales transactions (based on reporting date) totaled 52,816, a 21.4% increase from the previous month. After continuously declining from around 51,000 in August last year to about 38,000 in December, the volume turned upward in January this year for the first time in five months. Consequently, the cumulative transaction volume for January to March (139,340 units) increased by 16.8% compared to the same period last year. By region, the Seoul metropolitan area (22,722 units) and provinces (30,094 units) increased by 20.1% and 22.5%, respectively. During this period, Seoul's transaction volume rose by 27.2% to 6,098 units.

On the other hand, last month's jeonse and wolse (lease) transactions totaled 248,003, a 5.5% decrease from the previous month. Compared to the same month last year, it decreased by 6.1%. Jeonse transactions (101,961 units) fell by 15.4% compared to the same month last year, while wolse transactions (146,042 units) increased by 1.6%. In the cumulative total for January to March this year, wolse accounted for 57.9%, up 3.0 percentage points from the same period last year.