Completed but No Owners... Highest Number in 11 Years, Newly Built Apartments Left Dark and Empty

March Housing Statistics Released by the Ministry of Land, Infrastructure and Transport
Unsold Completed Units Exceed 25,000, Highest in Nearly 12 Years
Regional Areas See Significant Increase, Led by Daegu and Gyeongsang Provinces
Government Initiates REITs Purchases, but Market Recovery Remains Uncertain
Housing Permits and Transactions Rise Sharply, Yet Supply Still Lags Behind Previous Years

Last month, the number of unsold housing units after completion exceeded 25,000, marking the highest level in 11 years and 8 months. This means that many newly built homes remain vacant without owners. Unsold units after completion are considered particularly problematic, as they negatively impact not only developers but also existing residents. Although a dedicated real estate investment trust (REITs) for purchasing these unsold units was registered this month, experts predict it will be difficult to immediately reverse the housing market downturn, which has spread mainly across regional areas.

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According to the March housing statistics released by the Ministry of Land, Infrastructure and Transport on April 29, the total number of unsold homes nationwide at the end of last month was 68,920 units, down 1.6% from the previous month. However, the number of unsold units after completion increased by 5.9% during the same period to 25,117 units. This is the highest figure since August 2013, when it reached 26,453 units. The number of unsold completed units has continued to rise for 20 consecutive months since August 2023.

Of the unsold completed units, 4,574 were in the Seoul metropolitan area, a figure similar to the previous month. In regional areas, the number increased by 7.1% from the previous month to 20,543 units. Daegu recorded the highest number with 3,252 units, followed by South Gyeongsang Province (3,026 units), North Gyeongsang Province (2,715 units), and Busan (2,438 units), with the Yeongnam region showing both high numbers and a pronounced upward trend. Although Jeju (1,605 units) and South Jeolla Province (2,392 units) also have large volumes of unsold units, the increase in these areas has halted.

As part of the government's efforts to address the issue of unsold homes, a corporate restructuring (CR) REITs, which had been promoted since last year, was registered for the first time this month. The REITs registered by JB Asset Management is scheduled to purchase 288 unsold apartment units in Daegu. According to the Ministry of Land, Infrastructure and Transport, including the purchase volume of additional REITs to be registered in the future, nearly 2,000 units are expected to be acquired. Separately, Korea Land and Housing Corporation (LH) is coordinating with developers and other parties with the goal of purchasing 3,000 units. Even if these plans proceed as scheduled, it will be difficult to resolve the overall problem of unsold homes.

Meanwhile, the number of housing permits issued last month was 31,033 units, up 148.2% from the previous month. Although the increase is significant, it is interpreted as a base effect, as the volume had been steadily declining due to the prolonged housing market slump. Permits are considered a leading indicator in the construction sector, but last month's permit volume still fell short of the annual average. Housing starts last month totaled 13,774 units, a 36.8% increase from the previous month.

The number of units offered for sale last month, targeting multi-family housing such as apartments, was 8,646, up 60.6% from the previous month. This sharp increase is also attributed to the fact that there were no new supply cases in the Seoul metropolitan area in February. However, the actual supply volume remains lower than in previous years. The number of completed units last month was 26,124, a decrease of 27.8% from the previous month.

Last month's housing transaction volume was 67,259, up 32.7% from the previous month and 27.3% from the same period last year. Apartment transactions in Seoul led the increase, doubling to 9,349 during the same period. The surge in transactions was driven by the issue of lifting and re-designating land transaction permit zones in Seoul's Gangnam area. Last month, there were 239,044 rental transactions, of which 141,531 were monthly rentals, accounting for 59.2% of the total.