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 number of new apartment units available for occupancy nationwide next year will decrease by 24% compared to this year. In particular, the supply in Seoul is expected to drop by about 32%, which is likely to intensify instability in the jeonse and monthly rental markets.

According to Real Estate R114 on December 23, the number of new apartment units available for occupancy next year is estimated at 210,387, a decrease of 67,701 units from this year’s 278,088 units. Over the past decade, the national average for new apartment occupancy has been 350,000 units per year, so next year’s figure is only about 60% of that average. Since 2022, when the real estate market began to stagnate, the number of permits and pre-sales has decreased year-on-year, and this trend is now resulting in a decline in the number of units available for occupancy several years later.

The decrease in supply is expected to be especially pronounced in Seoul. In Seoul, the number of new units available for occupancy is projected to fall by 32%, from 42,611 units this year to 29,161 units next year. As the supply of new units declines, the number of jeonse listings will also decrease. With fewer listings, jeonse prices are likely to rise. The so-called “jeonse transaction cliff,” which has emerged as a result of government real estate policies restricting gap investments this year, is expected to worsen further. In Incheon, the supply will decrease by 25%, from 20,093 units this year to 15,161 units next year. In Gyeonggi Province, the number will decrease by 9%, from 74,156 units to 67,578 units.

In Sejong, there are no new apartment units scheduled for occupancy next year. The regions with the largest declines in occupancy rates after Sejong are South Gyeongsang Province (from 22,724 units to 7,682 units, a 66% decrease), Jeju (from 1,630 units to 559 units, a 66% decrease), North Gyeongsang Province (from 11,305 units to 5,286 units, a 53% decrease), and Daejeon (from 11,861 units to 6,667 units, a 44% decrease). Gwangju is the only region where the number of new units available for occupancy is expected to increase, rising by 119% from 5,318 units this year to 11,656 units next year.

Over the next three years, the supply of new apartment units in the Seoul metropolitan area is expected to continue declining. Real Estate R114 forecasts a gradual decrease from 136,860 units this year to 111,900 units next year, then to 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 new apartment supply next year is just the beginning, and the situation is likely to worsen in the long term. 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."