Quarter 1 Housing Supply Floods In, but "Difficult to Solve the Supply Drought"

Over 92,000 Households Supplied This Year... Exceeding Last Year by 30,000
Largest First Quarter Since Related Statistics Began... Illusion Caused by Last Year's Delayed Volume
Supply of Remaining Scheduled Units, Including Dunchon Jugong Facing Construction Halt Crisis, Also Uncertain

[Asia Economy Reporter Kangwook Cho] The government hinted at an excessive level of housing supply, and an unprecedented volume of apartment sales is flooding the market in the first quarter of this year. However, some point out that this is an optical illusion caused by the postponement of sales volumes scheduled for last year to this year. In particular, concerns are growing that it will be difficult to alleviate the supply drought as the atmosphere of holding out by delaying sales continues amid expectations of deregulation following the launch of the new government.

According to the Real Estate Agency's Subscription Home and the sales industry on the 17th, the scale of apartment supply sold nationwide so far this year has reached about 92,000 households. This figure exceeds the supply scale of 64,000 households in the first quarter of last year by nearly 30,000 households. It is the largest volume among the first quarters since related statistics began in 2000.

There have already been predictions that the largest volume in history will be released in the nationwide sales market in the first quarter of this year. According to Real Estate R114, the originally planned sales volume nationwide in the first quarter of this year exceeds 120,000 households (based on total households). This is nearly double the sales volume of the first quarter of last year, with about half of the volume in the metropolitan area. The adjustment of the large complex sales schedule planned at the end of last year played a part. In fact, about 23,000 households of the volume scheduled for the second half of last year were postponed to January this year. According to Real Estate R114 statistics, the total planned sales volume of complexes planned for sale in Seoul at the beginning of last year was 44,722 households, but only about 15% of the total planned sales volume was supplied last year.

It is uncertain whether all the planned sales volumes for the first quarter of this year will be supplied. Among the reconstruction and redevelopment complexes that had announced sales last year, many schedules have been postponed to this year due to issues with sales price calculation and internal conflicts among association members, and these conflicts have not yet been resolved. ‘Centreville Park Prestige’ in Yeokchon-dong, Eunpyeong-gu, Seoul (Yeokchon 1 District Reconstruction) and ‘Olympic Park Foreon’ in Dunchon-dong, Gangdong-gu (Dunchon Jugong Apartment Reconstruction) are complexes whose sales schedules have been delayed since 2020 due to sales price regulations. The Yeokchon 1 District, which was scheduled for sale in February, postponed the sales schedule again to May.

In particular, in the case of Dunchon Jugong, conflicts with the construction consortium (Hyundai Construction, HDC Hyundai Development Company, Daewoo Construction, Lotte Construction) have recently put the project at risk of suspension, making sales within the year uncertain. The construction companies have notified that they will stop construction on the 15th of next month. The disputes with the association have intensified over increased construction costs and sales delays. Additionally, some association members recently filed complaints with the prosecution against the executive branch and advisory committee, escalating into internal conflicts. Among the sales volumes in Seoul this year, 87% are supplied through maintenance projects. The scale of Dunchon Jugong Apartments is 12,032 households (4,786 general sales), accounting for 22% of the total sales volume in Seoul.

Since President-elect Yoon Seok-yeol has proposed ‘rationalization of sales price regulations’ as a real estate pledge, expectations for deregulation are high. The market expects that the atmosphere of holding out by delaying sales will continue until specific policies are announced. An industry official said, "In Seoul, where there are many maintenance projects, schedules are being delayed due to internal association circumstances and sales price issues," adding, "Also, the atmosphere of expecting sales prices to rise due to deregulation is likely to continue for the time being."

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