Apartment Supply Hits Lowest in 13 Years This Year... A Supply Drought Approaches

230,000 Households Supplied Nationwide This Year
45% of Last Year's Level
Polarization in the Subscription Market Deepens

As the number of apartments supplied this year hit the lowest level in 13 years, concerns about housing supply shortages are growing. In the subscription market, the limited supply has intensified the selection process based on location and sale price.

A sales banner hung at the Hanwha Forena Mia construction site in Gangbuk-gu, Seoul on the 31st. Photo by Jinhyung Kang aymsdream@

According to Real Estate R114 on the 18th, 231,549 apartment units were supplied nationwide this year. This is the lowest level in 13 years since 2010 (172,670 units). The supply in the first half of this year was recorded at 74,723 units, which is 45% of the same period last year (165,436 units).

With concerns over unsold units, high interest rates, and rising labor costs making price increases inevitable, construction companies have postponed sales, significantly reducing supply. However, from the third quarter of this year, the market has shown signs of recovery, mainly in Seoul and the metropolitan area. In the fourth quarter, 105,190 units were supplied, nearly half of the annual supply.

Despite the sluggish subscription market, the competition rate for subscriptions has increased. The average nationwide apartment subscription competition rate this year was 12.3 to 1, intensifying from 7.5 to 1 last year. The competition rate rose as fewer units were released compared to previous years, and demand concentrated on certain complexes.

Regional polarization has deepened. Areas with average subscription competition rates higher than the national average were Seoul (59.5 to 1), Chungbuk (37.2 to 1), and Daejeon (33.7 to 1). Last year, there were eight such areas, indicating that polarization has become stronger this year.

The number of regions with subscription competition rates below 1 to 1 increased by one compared to last year. The regions with undersubscription were Daegu at 0.1 to 1, Jeju at 0.3 to 1, and Ulsan at 0.5 to 1.

Experts predict that the polarization seen this year will continue into next year. Yoon Ji-hae, Senior Researcher at Real Estate R114, said, "With price increases expected to be inevitable next year, popular areas with steady waiting demand are likely to see continued efforts to secure subscription opportunities early. However, as the financial burden on demanders increases due to prolonged high interest rates, selective subscription tendencies will become more pronounced depending on the appropriateness of sale prices, location, and unique features of each complex."

Concerns about housing supply shortages persist as supply decreases. According to the Ministry of Land, Infrastructure and Transport, housing permits decreased by 36%, and housing starts fell by 57.2% up to October this year. Completed housing units also decreased by 18.5% during the same period. Typically, housing supply occurs 2-3 years after construction starts and 3-5 years after permits are issued. Accordingly, there are forecasts that supply shortages could lead to housing price instability.

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