Housing Permits at Lowest in 14 Years... Unsold Units Highest in 10 Years

Housing Permits Hit 14-Year Low
Private Sector Sees Sharp Decline as Construction Industry Contracts

Last year, the number of housing permits issued was recorded at the lowest level since 2010. The decline was particularly noticeable in the private sector. With construction costs rising and uncertainties unresolved, the entire construction industry appears to be contracting.

According to housing statistics released by the Ministry of Land, Infrastructure and Transport on the 5th, the number of housing permits issued last year was 428,244 units, similar to the previous year (428,744 units). Despite the contraction in supply conditions, the permit performance was maintained due to an increase in public housing. The public sector increased by 66%, from about 78,000 units in 2023 to about 129,000 units. Meanwhile, private sector permits decreased by 15%, from about 351,000 units to about 299,000 units during the same period.

View of apartment buildings in downtown Seoul from Inwangsan Mountain, Seoul. Photo by Yonhap News.

Last year’s permit performance dropped to the lowest level in 14 years since 2010 (about 386,500 units). In particular, the private sector plummeted to less than half compared to about 689,000 units in 2015, over 10 years ago. The public and private sectors are distinguished based on whether they receive support from the National Housing Fund. Housing permits are considered a leading indicator of the housing market. While the decline was clear mainly in local areas and non-apartments, the Seoul metropolitan area apartments showed a different trend, increasing by about 17% compared to the previous year.

Last year’s housing starts amounted to 305,331 units, a 26% increase from the previous year. Apartments increased by 36%, while non-apartments decreased by 21%. Similarly, the public sector led the overall performance by more than tripling compared to the previous year. The number of units sold last year was 231,048, a 20% increase over the same period.

In December last year, housing sales totaled 45,921 cases, down about 7% from the previous month. Both the Seoul metropolitan area and local regions saw declines. Lease transactions (jeonse and monthly rent) were 217,971 cases, up 14% during the same period. On an annual basis, sales increased by 16% compared to the previous year, while lease transactions decreased by 2% during the same period.

As of the end of last year, unsold housing units numbered 70,173, an 8% increase from the previous month. Although it seemed to be decreasing, the number exceeded 70,000 units again after five months. The number of unsold units that were fully constructed but not sold was recorded at 21,480 units. This malignant unsold inventory exceeding 20,000 units is the first occurrence since July 2014.

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