Seoul Housing Completions Halved Year-on-Year... Housing Supply Indicators Remain Weak Despite Increase in Permits

Despite Increases in Permits and Pre-Sales,
Construction Starts and Completions Continue to Decline
Rental Market Sees Shift Toward Monthly Leases

Last month, the number of housing permits and pre-sale units in the Seoul metropolitan area, including Seoul itself, increased year-on-year. However, there are analyses suggesting that the fundamental housing supply shortage has not been resolved, as both housing starts and completions declined. The increase in permits and pre-sale units was driven by a base effect from last year's supply contraction, but the actual indicators of housing starts and completions, which lead to construction and occupancy, continue to show sluggish trends.

According to the "April Housing Statistics" released by the Ministry of Land, Infrastructure and Transport on May 29, the number of housing permits in Seoul last month was 7,128 units, a 291.4% increase from 1,821 units in the same month last year. The number of permits in the Seoul metropolitan area reached 16,142 units, up 13.2% from 14,261 units a year earlier. The number of permits serves as a leading indicator for future housing supply in the market. An increase in permits means the volume of housing that will be supplied to the market in the future is also increasing.

A view of apartments from Lotte World Tower in Songpa-gu, Seoul. Photo by Yonhap News

The number of pre-sale units also rose. Last month, the number of pre-sale units in the metropolitan area was 17,425, up 4.8% from 16,628 units in the same month last year. In Seoul, 1,897 pre-sale units were recorded, surging 369.6% compared to 404 units a year earlier. This can be attributed to a base effect as some complexes postponed their pre-sale schedules after certain areas were designated as regulated zones at the end of last year, and because the pre-sale market shrank in the first half of last year due to political turmoil and the early presidential election.

In contrast, the number of housing starts, another leading supply indicator along with permits, dropped sharply. In the metropolitan area, the number of housing starts last month was 16,966 units, a 7.6% decrease from 18,352 units a year earlier. In Seoul, housing starts fell to 2,012 units, down 45.5% from 3,692 units in the same month of the previous year.

Completions also declined. Last month, the number of units completed in the metropolitan area was 8,724, down 53.1% from 18,603 units a year earlier. In Seoul, completed units totaled 3,816, a 55.5% decrease compared to 8,575 units in the same month last year, effectively halving the volume.

Despite the contraction in supply, transactions increased. Last month, the number of housing transactions in Seoul was 12,745 units, a 6.1% rise from 12,017 units a year earlier. By region, the four districts of Gangnam (Gangnam, Seocho, Songpa, and Gangdong) recorded 2,188 transactions, down 24.3% from 2,892 in the same month last year. In contrast, Gangbuk, an area with a higher concentration of mid- to low-priced apartments, saw 6,639 transactions, a 15.9% increase from 5,726 a year earlier.

In the rental market, there was a shift from long-term deposit-based leases (jeonse) to monthly rentals. Last month in Seoul, the total number of jeonse and monthly rental transactions was 69,425, a 0.3% decrease year-on-year. Of these, jeonse transactions numbered 22,021, down 18.5% from a year earlier. On the other hand, monthly rental transactions reached 47,404, up 11.3%.

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