Due to the collapse of the real estate economy, the number of unsold homes in Jeju is at an all-time high.
According to the status of unsold houses released by the Jeju Special Self-Governing Province and the Ministry of Land, Infrastructure and Transport, at the end of last month, the number of unsold houses in Jeju was counted as 1929. This is the highest ever since Jeju Island and the National Bureau of Statistics provided unsold house statistics from January 2007.
After recording a record high of 1,780 in January, the number of unsold homes in the Jeju area increased by 149 (8.4%) in one month, breaking another record high. There were 1022 unsold houses in Jeju-si district and 907 in Seogwipo-si district. Specifically, there were 625 unsold units in the dong area and 1277 units in the eup/myeon area, twice as many in the eup/myeon area compared to the dong area. Eup and Myeon districts accounted for 66.3%.
Although the overall increase may not be significant, the number of malignant unsold units, that is units not sold after completion, increased by 9.2% (64 units) from the previous month, from 698 units in January to 762 units in February.
Unsold housing units are directly affected by the real estate market. This is because when real estate prices fall, the price of new houses becomes expensive, and fewer people want to buy them.
If the economic downturn continues, construction companies reduce profits and sell them at discounts as general products, but the price range is different from general consumer goods, so it is not easy to solve. Unsold homes ultimately adversely affect the financial position of construction companies, driving them to the brink of bankruptcy.
A bigger problem is that the number of unsold houses that are classified as foreclosures after completion is increasing rapidly.
Since unsold homes are not mandatory, it is a voluntary reporting system, so it is a common opinion in the industry that the number of unsold homes after completion is more than twice the statistical value.
It is said that construction companies try to hide it because if unsold sales are revealed, it will be more difficult to sell them. For this reason, many voices are calling for the introduction of a mandatory reporting system for unsold houses.
Failure to accurately count unsold units will result in insolvency statistics, which will inevitably lead to confusion in housing policies. We need to get the statistics right and come up with measures to reduce the number of unsold homes.
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