The Trade Cliff Deepens, Predictable... Even You, Supply

300,000 Household Plan for Urban Complex Project
Only 60,000 Households Proposed Sites
Private Sales Largely Delayed Due to Price Ceiling System

[Image source=Yonhap News]

[Asia Economy Reporter Kangwook Cho] Despite the government's strong regulations deepening the transaction freeze in the real estate market, supply measures are failing to gain momentum. With private housing supply in Seoul shrinking due to the price ceiling system, public supply plans have also become tangled, causing delays in schedules and difficulties in securing quantities. Doubts are even growing about the feasibility of key projects such as the 2·4 measures' urban public housing complex development, public redevelopment and reconstruction, and public direct implementation maintenance projects.

According to the related industry on the 31st, for the urban complex project supplying a total of 306,000 households, the supply scale announced through the selection of 1st to 4th candidate sites since March is only 60,000 households (19.6%), which is less than 20%. Also, among the total supply scale of the 2·4 measures, the areas meeting the planned district requirements are just slightly over 6% so far. In the recent 4th candidate site announcement, the Seoul Gangnam area, which is the most anticipated, was excluded again following the 3rd round.

To make matters worse, the announcement of new housing sites totaling 131,000 households, including 110,000 in the metropolitan area, which was scheduled for last month, has been postponed to the second half of the year. The quantity announced so far does not even reach half of the government's housing supply target of 250,000 households.

In particular, the housing supply drought in Seoul appears to be prolonged. This is because construction companies preparing supply in the metropolitan area have postponed their sales schedules en masse due to profitability deterioration caused by the private land price ceiling system implemented in July last year. According to Real Today, 3,991 households are scheduled to be supplied in six locations nationwide in the first week of June, but Seoul is not included.

There are also concerns that the effect of the pre-sale of a total of 30,200 households this year in public housing sites in the metropolitan area, including the 3rd new town, will be minimal. This is because it is only about one-tenth of the 300,000 housing supply target in the metropolitan area including the 3rd new town, and actual move-in is expected to take at least 4 to 5 years.

Kwon Daejung, a professor of real estate at Myongji University, expressed concern, saying, "Since the current government's term is only about one year left, the success of government real estate policies such as urban complex projects cannot be guaranteed. It is uncertain how things will change if the administration changes."

This content was produced with the assistance of AI translation services.