Nationwide Unsold Homes Increase After 10 Months... Annual Supply Indicators Like Permits Remain Weak

Most of the Increase in Unsold Houses Last December in the Seoul Metropolitan Area
Annual Building Permits Down 25.5%... Largest Drop in 15 Years

The number of unsold houses nationwide has turned to an increasing trend for the first time in 10 months. The so-called "post-completion unsold houses," considered as malignant unsold houses, also exceeded 10,000 units for three consecutive months. Although the housing supply leading and lagging indicators such as permits, construction starts, sales, and completions all increased last month, the annual figures still showed sluggishness.

Unsold Houses Surpass 60,000 Units... Malignant Unsold Houses Also Increase

View of downtown apartments from Namsan, Seoul / Photo by Yonhap News

According to the "December Housing Statistics" announced by the Ministry of Land, Infrastructure and Transport on the 30th, as of the end of December last year, the total number of unsold houses nationwide was 62,489 units, an increase of 7.9% (4,564 units) from the previous month (57,925 units). The number of unsold houses had decreased for nine consecutive months since March after recording 75,359 units in January last year, but turned to an increasing trend again last month.

The number of unsold houses had been decreasing as new sales themselves declined. However, it is analyzed that the number increased again last month due to an increase in sales volume and a high-price sales trend.

In particular, unsold houses in the Seoul metropolitan area reached 10,031 units, up 43.3% (3,033 units) from the previous month (6,998 units), accounting for two-thirds of the total increase in unsold houses. In Incheon (3,270 units), the number increased by 1,972 units, and in Gyeonggi (5,803 units), it increased by 980 units. Seoul (958 units) saw an increase of 81 units.

Unsold houses in provincial areas totaled 52,458 units, accounting for 82% of the total. This was a 3.0% (1,531 units) increase from the previous month (50,927 units). By region, the increase was notable in Gyeongbuk (29.2%), Daejeon (19.7%), and Busan (18.3%). Although Daegu had the highest number of unsold houses nationwide at 10,245 units, it decreased by 83 units in one month.

Post-completion unsold houses have also steadily increased. In December last year, post-completion unsold houses numbered 10,857 units, up 3.7% (392 units) from the previous month (10,465 units). Compared to the same month last year (7,518 units), it surged by 44.4%. About 80% of post-completion unsold houses were concentrated in provincial areas. The highest numbers were in Jeonnam (1,212 units), Gyeongnam (1,116 units), Jeju (1,059 units), and Daegu (1,044 units).

Annual Housing Supply Indicators Such as Permits and Construction Starts Show Sluggishness

Provided by the Ministry of Land, Infrastructure and Transport

Leading and lagging indicators of housing supply all declined on an annual basis. According to the Ministry of Land, from January to December last year, cumulative housing permits totaled 388,891 units, down 25.5% from the previous year. This is the largest drop in 15 years since the global financial crisis in 2008 (-33.2%).

Housing permits in the Seoul metropolitan area were 180,412 units, down 5.5% from the previous year, while provincial areas (208,479 units) decreased by 37% during the same period. By housing type, apartments decreased by 20.0% to 342,291 units, and non-apartments decreased by 50.5% to 46,600 units compared to the previous year.

From January to December last year, construction starts were 209,351 units, down 45.4% from the previous year. The Seoul metropolitan area had 105,286 units, down 43.5%, and provincial areas had 104,065 units, down 47.2%.

Sales (approval) units also decreased by 33.1% to 192,425 units last year. The decrease was larger in provincial areas (-48.3%) than in the Seoul metropolitan area (-16.1%). In Seoul (23,564 units), the sales volume decreased by only 34 units compared to the previous year. Completions last year totaled 316,415 units, down 23.5% from the previous year.

However, looking only at December last year, housing supply indicators showed an increasing trend. Housing permits last month were 94,420 units, up 359.4% from the previous month, construction starts were 38,973 units, up 35.4%, and sales and completions were 28,916 units and 33,440 units, up 35.2% and 178.3%, respectively, compared to the previous month.

A Ministry of Land official said, "(Regarding the improvement in December indicators) it seems that the effects of the September 26 housing supply measures announced last year are gradually appearing," adding, "Permits increased mainly in the public sector. We are thinking of increasing the total volume significantly in January as well."

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