Unsold Homes Surge by 2,200 in Osan, Yangju, and Uijeongbu: "Policy Blind Spot" in Focus [Real Estate AtoZ]

Increase in Unsold Inventory Surpasses Entire Seoul Metropolitan Area (2,200 Units)
Large Complexes See Rising Inventory Due to Low Application Rates and Contract Cancellations
Provincial Areas Managed Through CR REITs and LH Purchases
Outs

In October, a significant concentration of unsold housing inventory emerged in three areas: Osan, Yangju, and Uijeongbu. Over the course of one month, there were as many as 2,200 unsold units. Unlike regions managed through public purchases and corporate restructuring (CR) REITs, the outskirts of the Seoul metropolitan area are considered a "blind spot" where policy support does not reach, leading to forecasts of a prolonged downturn.

'GL Elyum Yangju Deokgye Station' with a large-scale unsold inventory. Shinyoung.

According to Gyeonggi Province's "October Unsold Housing Status" report released on December 3, the combined increase in unsold units in Osan, Yangju, and Uijeongbu (2,241 units) surpassed the total increase for Gyeonggi Province as a whole (1,593 units). The increase in these three cities also exceeded the total increase for the entire Seoul metropolitan area (2,200 units). While some areas in Gyeonggi Province saw a decrease in unsold inventory, the large-scale surplus from these three regions effectively determined the overall increase.

Osan City saw the largest jump. The number of unsold units, which stood at just four in September, surged to 857 in October. This spike was mainly due to 853 unsold units at "Segyo Umi Lin Lake City," a complex with 1,424 units. In September, 956 people applied for 1,208 available units at this development, resulting in a competition ratio of 0.79 to 1. However, as a significant number of successful applicants declined to sign contracts, the number of unsold units rose sharply all at once.

An official from Umi Construction, the developer, commented, "These days, it takes at least six months to a year to sell out developments in the outskirts of the metropolitan area after the initial offering," adding, "Some places still have unsold inventory even by the time residents move in." There are also concerns that it is difficult to expect strong demand from neighboring regions such as Pyeongtaek (4,067 units) and Icheon (1,279 units), so-called "Ban-se-gwon" (areas adjacent to semiconductor industrial complexes), where unsold inventory is also significant.

Yangju also experienced an increase in unsold units. In just one month, the number of unsold units in the area rose by 715, from 1,376 to 2,091. At "GL Elyum Yangju Deokgye Station," a development with 1,595 units, 1,355 new unsold units were recorded. In August, only 156 people applied for 1,319 available units at this complex. A representative from Shinyoung, the developer, explained, "There was little demand during the initial application period, and even after switching to a first-come, first-served basis following Chuseok, the recovery was slow."

Uijeongbu, which shares a living sphere with Yangju, also saw its unsold inventory rise from 662 to 1,335 units. At "Tapseok Prugio Park 7" (935 units), 654 units were counted as unsold, significantly contributing to the overall increase.

The common factor among these three areas is that they are all on the outskirts of the Seoul metropolitan area, where the demand base is relatively weak. They are not regions expected to benefit from the "balloon effect" of the October 15 real estate measures. Due to poor accessibility to Seoul, demand for new housing applications is limited, and unlike provincial areas, they are not eligible for public purchases or CR REIT support. In fact, as of October, there were 51,518 unsold units in provincial areas-a large absolute number. However, compared to September (51,411 units) or the end of last year (53,176 units), it is difficult to say that the number of unsold units is increasing. Thanks to stabilization mechanisms such as CR REITs, Korea Land and Housing Corporation (LH), and Housing and Urban Guarantee Corporation (HUG), unsold inventory in provincial areas is being managed within a certain range.

CR REITs, which pool investors' funds to purchase unsold units after completion, have resolved about 1,000 unsold units in provincial areas through October. By the end of the year, the total is expected to reach 3,000 units. LH also plans to sequentially purchase a total of 8,000 unsold apartment units in provincial areas after completion by next year. HUG is working to acquire 1,500 unsold units before completion within this year through its "Unsold Inventory Buyback Program."

In contrast, the outskirts of the metropolitan area do not benefit from such structural support. Various regulations, such as the June 27 measure limiting mortgage loans for metropolitan area housing to 600 million won, apply equally to all metropolitan areas. However, there is a lack of institutional support to facilitate recovery, raising concerns that unsold inventory may continue to accumulate.

Park Wongap, Chief Real Estate Expert at KB Kookmin Bank, noted, "These days, it's no longer an era where people buy multiple homes, so it is difficult for new supply in outlying areas to be quickly absorbed." He added, "If the sale price is similar but accessibility to workplaces and residential conditions are inferior, there is no compelling reason to choose these developments." He continued, "Although these areas are subject to the same regulations as the rest of the metropolitan area, they have become a classic blind spot with no public purchases like in the provinces. Recovery will be difficult until transportation benefits, such as the full-scale launch of the GTX-C metropolitan express railway, materialize."