Only 'Ghost Apartments' Remain... With Daily Jobs Gone, Emergency Loans and Unemployment Benefits Out of Reach [Construction Crisis Report]

Collapse of Jobs Threatens Livelihoods
Construction Employment Symbolic Figure of 2 Million
Fell Below Mark in January for First Time in 8 Years
Unable to Cover Living Expenses, Turning to Private Lenders
Prolonged Unemployment Means N

An apartment construction site in Bukgu, Daegu, where construction has been halted for 11 months due to workers' wage arrears. Photo by Kang Jinhyung

At 10 a.m., the construction site was eerily silent. On July 22, under the scorching sun, the apartment construction site in Gwaneum-dong, Buk-gu, Daegu, looked as if time had stopped. Although it was prime working hours, not a single person could be seen. White waterproof covers were draped over piles of scattered materials on the ground, and under a faded "Caution: Falling" banner, safety vests were stacked in heaps.

Between the 20-story apartment buildings, their gray concrete frames exposed, a tower crane stood motionless. Construction at this site has been halted for 11 months due to unpaid wages.

The apartment construction site in Daemyeong-dong, Nam-gu, was also quiet. With less than 100 days left until the scheduled completion date, the progress rate was only 34%. Construction was halted after project funds dried up due to unsold units. Even though it is just a 20-minute drive from Daegu Station and has excellent public transportation infrastructure, it was not enough to overcome the market downturn. The 14,000-square-meter (about 4,000 pyeong) site was left empty, and the reinforcement bars installed to build the ground-level columns and walls have been abandoned for a year.

Unsold units at every site... Only 'ghost apartments' remain

The phrase "number one in chronic unsold units" truly fit the situation. The apartment construction sites in this area were in a dire state. While traveling by car, I passed several fenced-off sites, many of which had halted construction. Some sites had only temporary fences installed and had not even broken ground for months; in some redevelopment zones, only empty, undemolished houses remained. There were even complexes halted just two weeks before move-in due to disputes over additional contributions between the cooperative and the contractor. Each site had its own story.

An apartment construction site in Bukgu, Daegu, where construction has been halted. Safety vests and construction materials are piled up on one side of the site. Photo by Kang Jinhyung

This was not just a problem in Daegu. Nearby regions faced similar circumstances. Kim, a construction worker with 25 years of experience whom I met in Jung-gu, Busan, said, "In the Gyeongnam area, Jinju is the only place where apartment construction is ongoing," and added, "Compared to 2022, the number of sites in Busan has dropped to less than half, and this situation has continued for years."

A construction worker in his 40s from Gwangju explained, "Although the city is carrying out some special projects, outside firms are winning contracts at the lowest prices, so mainly undocumented foreign workers with lower wages are being brought in. Skilled local workers find it difficult to get on site."

The downturn is also spreading to the Seoul metropolitan area. Lee, a construction worker in his 50s from Incheon, said, "I haven't had work since March. There are many sites fenced off and left abandoned for months." He added, "Incheon is still better off. Other regions are struggling even more."

An apartment construction site in Daemyeong-dong, Nam-gu, Daegu. Construction has been halted for a year due to funding issues caused by unsold units. Photo by Kang Jinhyung

The impact of the crisis is also visible in the data. In the first quarter of this year, Daegu's real gross regional domestic product (GRDP) plummeted by 24.3%. Jeonnam (-24.0%), Sejong (-19.4%), and Gwangju (-18.5%) followed. Major cities like Seoul (-7.7%), Incheon (-7.2%), and Busan (-6.9%) were no exception. During the same period, the national GRDP growth rate was just 0.1%, a sharp slowdown from the previous quarter's 1.1%. The sluggish construction sector has dragged down overall regional economic growth.

The Bank of Korea forecasts this year's construction investment growth rate at -6.1%, the lowest since 1998 (-13.2%) in the aftermath of the financial crisis. The decline in investment leads to fewer construction orders and project starts, which in turn reduces both employment and demand for materials. In fact, construction performance in the first quarter of this year fell by 21.2% compared to the same period last year, marking the lowest level since the financial crisis.

Unemployment benefits and insurance... Construction workers pushed out of the social safety net

The brunt of the construction downturn is hitting the most vulnerable: day laborers. The symbolic figure of "2 million" employed in the construction sector fell below that threshold in January this year, for the first time in eight years since 2017. For six consecutive months, the number has remained in the 1.9 million range. According to Statistics Korea, as of June this year, there were 1.96 million construction workers, a decrease of 97,000 from the previous year. This marks 14 consecutive months of decline.

When daily jobs disappear, workers cannot cover living expenses. Many turn to emergency loans or private lenders, and in the process, some become credit delinquents. Kim said, "My income is unpredictable, but credit card bills and living expenses keep coming. When unemployment was short-term, unemployment benefits helped me get by, but now that work has dried up, even the benefits are running out, so there is no solution." The longer the period without work, the harder it becomes to meet the requirements for unemployment benefits (at least 180 days of employment in the past 18 months).

The same applies to health insurance and the national pension. To qualify, one must be employed for more than one month and work at least eight days a month, but many fail to meet these criteria and lose eligibility. The longer construction is suspended, the more workers are excluded from the social safety net. Health insurance is especially hard hit. The moment a worker loses employee status, they are switched to local subscriber status and must pay the full premium themselves. This adds fixed expenses on top of having no income.

Construction equipment operators, such as excavator or tower crane drivers, are classified as "special-type workers" and are not even eligible for unemployment benefits. Registered as sole proprietors, they are excluded from the welfare safety net even when work dries up.

In Yeongcheon, North Gyeongsang Province, a man in his 50s who drove a dump truck took his own life early last year. His colleague Kim said, "When construction stopped, he had to pay for fuel and gravel out of pocket, but no money was coming in. He put his children through college, but in the end, he bore it all alone until he couldn't anymore." Most dump trucks and excavators are operated on installment plans, with monthly payments reaching 4 million won. If payments are overdue, finance companies repossess and auction off the equipment. When even living expenses and credit card bills are overdue, life can collapse in an instant.

'Construction Crisis Report' Series Order

<1-1> Construction Sites Halted, Day Laborers' Lives Collapsed
<1-2> "Three or Four More Bankruptcies"... Mid-sized Builders on the Chopping Block
<2-1> PF: The Lifeline That Became a Trap
<2-2> Easing Multi-Homeowner Regulations, Key to Reviving Local Real Estate
<3-1> "Every Day Is Nerve-Wracking": Subcontractors and Suppliers Shaken
<3-2> Even Major Builders Can't Avoid Wage Arrears
<3-3> LH and Local Governments Also Owe Wages
<3-4> President Steps In... Urgent Need for Vertical Structure Reform
<3-5> The Company That Survived Without Illegal Re-Subcontracting
<3-6> United Hands at Collapsed Sites
<4-1> Foreign Construction Workers Encroaching on Local Jobs
<4-2> Not 'Regulating Foreigners' but 'Protecting Locals'
<4-3> The Root Cause of Deteriorating Profitability: Frequent Re-Construction