Next Year’s Apartment Supply to Drop by 24%... Seoul Falls Below 30,000 Units [Real Estate AtoZ]

67,701 Fewer Units Than This Year
Seoul Supply Drops to Just 29,161 Units
Decline Expected to Continue Over the Next Three Years
"Severe Imbalance in High-Demand Areas"

It is projected that the nationwide supply of new apartment units next year will decrease by 24% compared to this year. In particular, Seoul is expected to see a reduction of about 32%, which is likely to further destabilize the jeonse and monthly rental markets.

According to Real Estate R114 on December 23, the number of new apartment units scheduled for occupancy next year is 210,387, which is 67,701 units fewer than this year’s 278,088 units. Over the past decade, the national average for new apartment supply has been 350,000 units, making next year’s figure just 60% of that average. Since 2022, when the real estate market began to stagnate, the number of permits and pre-sales has declined year-on-year, and this trend is now resulting in a reduced supply of new units several years later.

The decrease in Seoul’s supply is expected to be particularly significant. In Seoul, the number of new units is projected to fall from 42,611 this year to 29,161 next year, a 32% drop. A decrease in supply leads to fewer jeonse listings, and as listings dwindle, jeonse prices rise. The current freeze in jeonse transactions, caused by government real estate measures that have blocked gap investments, is likely to intensify further. In Incheon, the supply is expected to decrease by 25%, from 20,093 units this year to 15,161 units next year. Gyeonggi Province is projected to see a 9% decrease, from 74,156 units to 67,578 units.

In the case of Sejong, there are reportedly no new units scheduled for occupancy. The regions with the largest percentage decreases in new supply are Gyeongnam (from 22,724 units to 7,682 units, down 66%), Jeju (from 1,630 units to 559 units, down 66%), Gyeongbuk (from 11,305 units to 5,286 units, down 53%), and Daejeon (from 11,861 units to 6,667 units, down 44%). Gwangju is the only region where supply is expected to increase, rising by 119% from 5,318 units this year to 11,656 units next year.

The supply of new apartment units in the Seoul metropolitan area is likely to continue declining over the next three years. Real Estate R114 predicts a gradual decrease from 136,860 units this year to 111,900 units next year, 108,191 units in 2027, and 98,487 units in 2028.

Kim Hyosun, Chief Real Estate Specialist at NH Nonghyup Bank, stated, "The decrease in supply next year is just the beginning, and in the long term, the situation will worsen. In areas with high demand for apartments, the imbalance between supply and demand for jeonse and monthly rentals is expected to become even more severe."