Decimal Point Competition Rates Surge... Local Unsold Housing Complaints Grow Louder

The view of the downtown apartment complex from Namsan, Seoul, on the 7th

As the real estate market faces a deepening transaction freeze, the outcry over unsold units is growing louder in the provinces. Among the complexes launched this year, some have recorded subscription competition rates in decimal points. In particular, with a supply surge expected in the provinces, concerns over unsold units are likely to increase further.

According to housing statistics released by the Ministry of Land, Infrastructure and Transport on the 28th, as of the end of January, the total number of unsold houses nationwide was 21,727 units, an increase of 22.7% (4,017 units) compared to the previous month (17,710 units). Unsold units in the metropolitan area decreased by 12.2% to 1,325 units compared to the previous month, but in the provinces, they increased by 25.9% to 20,402 units. Provincial unsold units have been on the rise for three consecutive months, recording 12,622 units in November and 16,201 units in December last year. Especially Daegu, which has emerged as the "graveyard of unsold units," has not escaped sluggishness since the new year. The number of unsold houses in Daegu in January surged by 86.0% compared to the previous month to 3,678 units. Gyeongnam recorded 3,124 units, up 66.3%, and Chungnam 1,383 units, up 36.7%.

The sharp increase in unsold units in the provinces is largely due to subscription shortfalls. In provincial sales conducted this year, complexes with competition rates in decimal points have been appearing one after another. According to the Ministry of Land, Infrastructure and Transport's subscription website, last month, "Dalseo Lotte Castle Central Xi" in Bon-dong, Dalseo-gu, Daegu, had 118 applicants for 470 units, recording a competition rate of 0.25 to 1. "Yeongdae Hospital Station Gold Class Central" in Daemyeong-dong, Nam-gu, Daegu, had 90 applicants for 655 units, a rate of 0.14 to 1, and "Nanabarua Apartment" had 24 applicants for 57 units, a rate of 0.42 to 1.

Seo Jin-hyung, president of the Korea Real Estate Society (professor at Gyeongin Women's University), analyzed, "With strengthened loan regulations (total debt service ratio) and the visible contraction of the real estate market, buyers have shifted from 'blind subscriptions' to 'careful selection'." In fact, expectations for the sales market have cooled sharply. The Housing Industry Research Institute announced that the February Housing Sales Sentiment Index (HSSI) forecast dropped 4.7 points from the previous month to 71.5. This marks a decline for three consecutive months since December last year and is the lowest in one year and five months since September 2020 (60.8). A figure above 100 indicates a positive outlook on the sales market, while below 100 indicates a negative outlook.

The problem is that the supply surge in the provinces is expected to continue for the time being. According to the real estate information platform Asil, the apartment move-in volume in Daegu this year is 19,812 units, already exceeding the appropriate demand (11,919 units), and next year it will increase further to 32,623 units. Gyeongbuk will increase from 10,758 units this year to 21,018 units next year, and Chungnam will rise from 16,037 units to 20,772 units during the same period.

An official from the sales industry said, "Apartments subject to the price ceiling system, which can offer significant capital gains, or public land sales complexes with excellent living infrastructure may continue to see subscription demand," but added, "In a situation where a nationwide supply surge is expected, complexes with poor location conditions or less attractive prices are likely to face unsold unit problems."

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