Accumulating Unsold Houses in the Seoul Metropolitan Area... Doubled Since the Beginning of the Year

2,970 Households as of Late April... Double the 1,325 Households in January
Seoul Increased from 47 to 360 Households, 6.6 Times Growth This Year
Funding Difficulties Due to Loan Regulations and Housing Market Slump
High Sale Prices Increase Burden on Buyers

Apartment view in the Seoul area (Photo by Yonhap News)

[Asia Economy Reporter Ryu Taemin] Amid the ongoing slump in the housing market, unsold homes in the Seoul metropolitan area have more than doubled this year. Due to interest rate hikes, loan regulations, and a stagnant market, securing funds has become difficult, and the perception of 'high sale prices' is spreading, increasing the burden on buyers.

According to housing statistics released by the Ministry of Land, Infrastructure and Transport on the 31st, as of the end of April, unsold homes in the metropolitan area totaled 2,970 units, up 1.7% (49 units) from the previous month. Unsold homes in the metropolitan area have surged this year. In January, there were only 1,325 units, but the number steadily increased to 2,970 units last month, more than doubling.

In particular, the number of unsold units increased significantly in Seoul and Gyeonggi Province. In Seoul, unsold units rose 6.6 times (313 units) from 47 units at the beginning of the year to 360 units. According to the Seoul Real Estate Information Plaza, more than half of these, 195 units, were in Gangbuk-gu. This was followed by Dongdaemun-gu (95 units), Gangdong-gu (36 units), and Guro-gu (29 units). By size, units under 40㎡ (exclusive area) accounted for 132 units, 40?60㎡ for 149 units, and 60?85㎡ for 79 units, indicating that relatively less popular small-sized units dominated.

During the same period, Gyeonggi Province saw an increase from 1,030 units to 2,146 units, a rise of 1,116 units (108%). By region, Anseong City recorded the highest number with 1,045 units. This was due to undersubscription in four of the six housing types (788 units for general supply) of the 'Anseong Granluce' project applied for in March, and the 'Anseong Gongdo Central County Edupark' project, which offered 416 units for general sale last month, where only 182 people applied, resulting in multiple unsold complexes. This was followed by Pyeongtaek City (328 units), Yongin City (222 units), Hwaseong City (206 units), and Goyang City (113 units).

Loans Difficult, High Sale Prices... Increasing Burden on Buyers

This is interpreted as a significant increase in the proportion of unsold units due to difficulties in securing funds caused by recent loan regulations. According to the Apartment Move-in Outlook Index released by the Korea Research Institute for Human Settlements in May, 30.6% of nationwide apartment non-move-ins last month were due to failure to secure balance loans. This is believed to be the effect of the borrower-specific Debt Service Ratio (DSR) regulation implemented this year, which has made it difficult to secure funds through interim and balance loans.

The housing market slump, making it harder to find new homes, is also cited as a major cause. The Korea Research Institute for Human Settlements announced that delays in selling existing homes accounted for the highest cause of non-move-ins at 36.7%. Cases where interim payments were delayed or unpaid, resulting in automatic contract cancellations, are classified as unsold units.

The worsening housing market outlook and the perception of high sale prices also appear to have contributed to the increase in unsold units. In the case of 'Cantavil Suyu Palace' in Gangbuk-gu, Seoul, where a large-scale undersubscription occurred with over 90% of 216 units remaining unsold, the sale price for a 59㎡ unit reached as high as 920 million KRW because it was not subject to the price ceiling system. In Songdo, Incheon, sale prices for 'Songdo Xi The Star' and 'Songdo Lux Ocean SK View' exceeded 900 million KRW, making it impossible to obtain group loans for interim payments, which led to a large number of unsold units. Song Seunghyun, CEO of Urban and Economy, said, "The outlook for the housing market has changed compared to last year when house prices were soaring, and buyers are hesitating. Along with this, the perception that sale prices are high seems to be increasing the number of people hesitating to sign contracts."

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