Abandoned Apartments: 11 Years of Vacancy
- Seoul, South Korea – South Korea's housing market faces challenges as the number of unsold homes, particularly those completed but remaining vacant, continues to climb.
- According to housing statistics released march 29 by the Ministry of Land, Infrastructure and Transport, the total number of unsold homes nationwide stood at 68,920 at the end...
- The problem is more pronounced in certain regions.Of the total unsold homes after completion, 4,574 are located in the Seoul metropolitan area, while 2,543 are in other provinces,...
South Korea Grapples with Rising Unsold Housing Inventory
Table of Contents
- South Korea Grapples with Rising Unsold Housing Inventory
- Unsold Homes Reach 11-Year high
- Regional Disparities in Unsold Inventory
- government Intervention and REITs
- Housing Licenses and Construction Trends
- Apartment Sales and Completion Rates
- Housing Market Transactions Increase
- South Korea’s Housing Market: Unsold Inventory and Market Trends
- What is the Current State of Unsold Homes in South korea?
- Which Regions are Most Affected by Unsold Housing?
- what is the Government Doing to Address Unsold Housing?
- How are Housing Licenses and Construction Trends?
- What Were the Apartment Sales and Completion Rates Last Month?
- Are Housing Market transactions Increasing?
- Key Housing Market data Summary
Seoul, South Korea – South Korea’s housing market faces challenges as the number of unsold homes, particularly those completed but remaining vacant, continues to climb. concerns are mounting over the potential impact on developers and existing residents.
Unsold Homes Reach 11-Year high
According to housing statistics released march 29 by the Ministry of Land, Infrastructure and Transport, the total number of unsold homes nationwide stood at 68,920 at the end of last month, a decrease of 1.6% from the previous month. However, the number of completed but unsold homes increased by 5.9% to 25,117. This is the highest level since August 2013, when 26,453 such units were recorded. The number of unsold homes after completion has risen for 20 consecutive months since August 2023.
Regional Disparities in Unsold Inventory
The problem is more pronounced in certain regions.Of the total unsold homes after completion, 4,574 are located in the Seoul metropolitan area, while 2,543 are in other provinces, a 7.1% increase from the previous month. Daegu has the highest number of unsold units at 3,252. Gyeongnam (3,026), Gyeongbuk (2,715), and Busan (2,438) also have significant inventories. While Jeju (1,605) and Jeonnam (2,392) also have a considerable number of unsold homes, the upward trend has reportedly stopped.
government Intervention and REITs
The government is attempting to address the issue through company restructuring (CR) REITs, which it has promoted since last year.One such REIT, registered this month by JB Asset Management, will purchase 288 unsold apartments in Daegu.The Ministry of Land,Infrastructure and Transport aims to facilitate the purchase of nearly 2,000 households through REITs. Additionally, the Korea Land and Housing Corporation (LH) is coordinating with developers to purchase 3,000 households. however, it remains uncertain whether these measures will be sufficient to resolve the overall problem of unsold housing.
Housing Licenses and Construction Trends
Last month saw 31,033 housing licenses issued, a 148.2% increase from the previous month. Despite this increase, the overall volume of licenses has been decreasing due to the ongoing housing recession. Licensing is considered a leading indicator in the construction industry, and last month’s figure is below the average of the previous year. Housing construction last month totaled 13,774 households, a 36.8% increase compared to the same period last year.
Apartment Sales and Completion Rates
Sales of apartments and similar units reached 8,646 last month, a 60.6% increase from the previous month. While the percentage increase is significant, partly due to low sales in the metropolitan area in February, the overall volume remains lower than historical averages. The number of housing completions last month was 26,124, a 27.8% decrease from the previous month.
Housing Market Transactions Increase
The total volume of housing transactions last month was 67,259, a 32.7% increase from the previous month and a 27.3% increase compared to the same period last year.Seoul saw a significant increase in apartment transactions, with approximately 9,349 cases, doubling the number from the same period last year.This increase is partly attributed to discussions surrounding the redevelopment of areas in the Gangnam district. Monthly rent and lease volumes totaled 239,044 cases, with rent accounting for 141,531, or 59.2% of the total.
South Korea’s Housing Market: Unsold Inventory and Market Trends
This article analyzes teh South Korean housing market, focusing on the increasing number of unsold homes, regional disparities, government interventions, and recent market activity. It uses data from the Ministry of Land, Infrastructure and Transport and other sources.The details is current as of the release date of the data, March 29th.
What is the Current State of Unsold Homes in South korea?
the South Korean housing market is facing challenges due to a rising number of unsold homes. At the end of last month, the total number of unsold homes nationwide was 68,920, a decrease of 1.6% from the previous month. However, the number of completed but unsold homes increased by 5.9% to 25,117. this is the highest level since August 2013, and has risen for 20 consecutive months since August 2023.
Which Regions are Most Affected by Unsold Housing?
The issue of unsold housing is more pronounced in specific regions of South Korea. Here’s a breakdown:
- Seoul Metropolitan Area: 4,574 unsold homes after completion.
- Other Provinces: 2,543 unsold homes (a 7.1% increase from the previous month).
- Daegu: Highest number of unsold units at 3,252.
- Gyeongnam: 3,026 unsold homes.
- Gyeongbuk: 2,715 unsold homes.
- Busan: 2,438 unsold homes.
- Jeju: 1,605 unsold homes.
- Jeonnam: 2,392 unsold homes.
what is the Government Doing to Address Unsold Housing?
The South Korean government is attempting to address the issue through company restructuring (CR) REITs (Real Estate Investment trusts). These reits are designed to purchase unsold apartments. JB Asset Management registered a REIT this month to purchase 288 unsold apartments in Daegu. The Ministry of Land, Infrastructure and Transport aims to facilitate the purchase of nearly 2,000 households through REITs. The Korea Land and Housing Corporation (LH) is also coordinating with developers to purchase 3,000 households. However, the effectiveness of these measures remains uncertain.
How are Housing Licenses and Construction Trends?
Last month saw a meaningful increase in housing licenses, but the overall volume remains lower than historical averages because of the ongoing housing recession. Housing construction increased compared to the same period last year.
- Housing Licenses: 31,033 issued last month, a 148.2% increase from the previous month.
- Housing Construction: 13,774 households constructed last month, a 36.8% increase compared to the same period last year.
What Were the Apartment Sales and Completion Rates Last Month?
Apartment sales increased last month, but housing completions decreased.
- Apartment Sales: 8,646 units sold, a 60.6% increase from the previous month.
- Housing completions: 26,124 units completed,a 27.8% decrease from the previous month.
Are Housing Market transactions Increasing?
Yes, housing market transactions are increasing. Total housing transactions increased last month.
- Total Housing Transactions: 67,259, a 32.7% increase from the previous month and a 27.3% increase compared to the same period last year.
- Seoul Apartment Transactions: approximately 9,349 cases, doubling the number from the same period last year, partly due to redevelopment discussions in the Gangnam district.
- Monthly Rent and Lease Volumes: 239,044 cases, with rent accounting for 141,531, or 59.2% of the total.
Key Housing Market data Summary
Here’s a concise summary of key data points from the provided article:
| Metric | Value | Change Compared to Previous period |
|---|---|---|
| Total Unsold Homes | 68,920 | -1.6% |
| Completed but Unsold Homes | 25,117 | +5.9% |
| Housing Licenses Issued | 31,033 | +148.2% |
| housing Construction | 13,774 households | +36.8% year-over-year |
| Apartment Sales | 8,646 | +60.6% |
| housing Completions | 26,124 | -27.8% |
| Total Housing Transactions | 67,259 | +32.7% |