[Seoul, Now]Housing Crisis: What Seoul Needs Is a Redesign of the Supply System

Most Housing Issues in Korea Originate in Seoul
Housing Statistics Must Be Interpreted Effectively
Short- and Medium-Term Solutions Should Be Comprehensive and Concurrent

The Asia Business Daily database.

When looking at the numbers, the challenges faced by married couples trying to find a home in Seoul seem overwhelming. Last year, there were 240,000 marriages across the country. In Seoul alone, 49,374 couples registered their marriages over the course of the year. This means that more than 4,000 new households were formed in Seoul every month. However, the housing market’s response to these newlyweds hoping to settle down in Seoul is harsh.

The housing supply rate in Seoul stands at 93.9% as of 2024, the lowest among all cities and provinces nationwide. With 4,159,500 households and only 3,907,600 housing units, Seoul faces a shortage of more than 250,000 homes. A 100% housing supply rate would mean that every household has a home, so structurally, Seoul currently lacks homes for 250,000 households.

The Seoul Metropolitan Government disputes this figure. It argues that if 265,000 officetel units used for residential purposes are included in the housing count, Seoul’s actual housing supply rate reaches 100.3%. At first glance, this seems like a plausible rebuttal. However, this logic also works in reverse: semi-basement units are already included in the housing supply statistics. In Seoul, about 228,000 households live in semi-basement units.

While the Seoul city government boosts the housing supply rate by counting officetels as homes, the statistics also include semi-basement households that are exposed to flood risks as regular homes. Even without adding other marginal housing types like tiny rooming houses or gosiwon, the current housing supply figures for Seoul count a significant portion of units with low residential suitability as homes.

What about multi-household rented rooms, another non-preferred housing type? Multi-household homes make up 23% of all housing types in Seoul. Of Seoul's 4,159,500 households, 915,000 live in multi-household dwellings.

The reason for discussing the housing supply rate is that interpretation of these statistics determines the starting point and direction of policy. If the rate is viewed as low, one will feel the need for multidimensional and proactive supply policies. Conversely, if the situation is judged to be not so severe, the focus will shift to suppressing speculative demand or curbing investment-driven purchases.

Most conflicts and policy debates surrounding real estate and housing issues in Korea occur in Seoul. Due to population and job concentration in the capital, both real demand and investment demand overlap, resulting in intense price volatility, instability in the rental markets, and the acute frustration of young people and non-homeowners trying to buy a home. The concentration of atypical and substandard housing—such as semi-basements, rooftop rooms, and gosiwon—is also most severe in Seoul.

Even when people who cannot afford to live in Seoul are pushed out to nearby areas like Gyeonggi or Incheon, their workplaces remain in Seoul, making commuting more difficult. The housing issue is spreading into a broader problem affecting quality of life throughout the metropolitan area, and Seoul remains the epicenter. Since the desired level of housing supply is not being met, there is little chance that home prices will stabilize.

In addition, Seoul’s supply bottleneck is failing to keep up even with basic demand. This is not just a temporary phenomenon but is becoming entrenched as a structural problem. It is not enough to simply blame excessive demand from speculation or investors. The repeated focus on suppressing demand and tightening loan regulations has clear limitations. That is why the perspective taken towards the statistics is so important.

Ultimately, what Seoul needs now are one-off remedies, medium-term supply measures, and a complete redesign of the housing supply system—all at the same time. Even when the Seoul city government introduces groundbreaking supply policies, the lack of sufficient public officials to handle the work or bottlenecks in the permitting process frequently delay project execution.

Although new systems have been created to increase the speed of supply and procedures have been drastically shortened, there are many cases where unscrupulous operators exploit these changes, causing benefits meant for residents to leak away and projects to be delayed. This is why redesigning the supply system is especially necessary, and identifying and resolving the causes of bottlenecks at every stage is essential.

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