"Developers Race Against Time: Seoul Housing Permits and Construction Starts Surge Over 40%"

Ministry of Land Announces "August 2023 Housing Statistics and Finalized 2022 Housing Construction Results"

From January to August of this year, both housing permits and housing starts in Seoul increased by over 40% compared to the same period last year. The government attributed this to policies such as building regulation relaxations, expanded financial support, and increased public purchases proving effective. At redevelopment sites, there are also moves to advance construction start dates in an effort to qualify for government support.

A view of the Eunma Apartment area in Daechi-dong, Gangnam-gu, Seoul. Photo by Hyunmin Kim

According to the "August Housing Statistics" released by the Ministry of Land, Infrastructure and Transport on September 30, housing permits in Seoul as of the end of August totaled 39,940 units, up sharply by 40.4% from a year earlier. Housing starts rose to 20,679 units, an increase of 41.1%. Across the entire Seoul metropolitan area, housing permits reached 96,056 units (up 5.4%) and housing starts were 86,739 units (up 1.5%).

In Seoul, permits and housing starts increased for both apartments and non-apartments. Apartment permits amounted to 34,017 units, while non-apartment permits totaled 5,923 units—rising by 37.4% and 60.7%, respectively, year-on-year. The growth rate for housing starts was 34.3% for apartments and 67.7% for non-apartments. The total number of permits in Seoul also exceeded the recent 10-year average for the same period by about 6%.

Jang Woo-cheol, Housing Policy Director at the Ministry of Land, Infrastructure and Transport, stated, "This is the result of supply measures announced consecutively since May, combined with rapid permit processing by local governments. Some support measures have not yet been reflected in law, but the expectation that it is advantageous to advance projects is driving both permits and housing starts."

The Ministry explained that public sector players acting as buyers in the non-apartment segment helped support supply. In its May 22 policy, the government decided to expand new purchase agreements until the non-apartment market in the regulated Seoul metropolitan area normalizes. Policy Director Jang added, "Expansion of public acquisitions created new conditions for developers who were worried about unsold units or had difficulty securing project financing (PF) loans."

The August 13 policy included measures to encourage early permits and starts, such as mitigation of land donation requirements, exemptions of development charges, and support for loan interest on project costs.

Eunma Apartments and Jamsil Jugong 5 Reflected in Permits... Redevelopment Sites Favor Early Starts

Large-scale redevelopment projects boosted Seoul's supply figures. Looking at August alone, Seoul issued 11,306 housing permits—seven times more than in the same month of last year (1,605 units), largely due to approval for the Eunma Apartments project of about 6,000 units. While the official approval was granted in July, it was counted as an August result due to delays in local administration reporting. In addition to Eunma, Jamsil Jugong 5 Complex (6,411 units), Hannam District 5 (2,592 units), and Geoye Saemaeul (1,678 units) were all granted permits this year, while Junggye Bondong (3,178 units), Heukseok District 11 (1,515 units), and Sillim District 2 (1,430 units) began construction.

At the Geoye Saemaeul public redevelopment site, there are expectations that support will depend on when construction commences. Following the August 13 policy announcement, the government proposed to raise the acquisition price for public rental housing provided via relaxed plot ratios from 80% to 100% of the standard construction cost, for redevelopment projects that obtain final management approval and begin construction by 2028.

A representative from the Geoye Saemaeul Public Redevelopment Residents' Council said, "The prospect of receiving 100% rather than just 80% of the construction cost for rental apartments if we start construction by 2028 is significant. A 20% difference amounts to a huge amount in construction costs, so there is motivation to move quickly." The project aims to receive final management approval by February or March of next year, then break ground by 2028.

Completions Down 27%... Fallout from Weak Starts in 2023

Actual housing completions, which lead to occupancy, have been on the decline. From January to August nationwide, there were 150,664 completions, down 27.2%. The Seoul metropolitan area saw 80,075 completions (down 21.6%), while Seoul itself recorded 25,630—down 19.1%. The Ministry explained, "The decline in completions is occurring with a time lag, mainly due to a contraction in housing starts in 2023 resulting from a project financing (PF) crisis and rising construction costs at the end of 2022."

Nationwide, home purchase transactions from January to August this year totaled 507,818, an 8.3% year-on-year increase. In August alone, there were 48,359 transactions—down 23.5% from the previous month. Seoul apartment trades decreased to 4,589, a decline of 30.1% from the previous month. Lease transactions (both jeonse and monthly rent) from January to August recorded 1,859,421, a 2.1% decrease year-on-year. In August, transaction volume was 199,204—down 5.6% from the previous month, with 59,749 for jeonse and 139,455 for monthly rent. The proportion of monthly rent in the cumulative lease transactions for this year has risen to 68.5%, up 6.3 percentage points compared to the same period last year.

At the end of August, there were 69,134 unsold homes nationwide—an increase of 1.3% from the previous month. In the Seoul metropolitan area, this figure fell by 1.7% to 19,136, while in non-metropolitan areas, it rose 2.5% to 49,998. Post-completion unsold homes, often referred to as "problematic unsold units," decreased 3.7% to 28,080, with 84.4% (23,711 units) of these in non-metropolitan areas.

2025 Confirmed Completions 42,000 Less Than Provisional Figure

On the same day, the Ministry also released the "Confirmed 2025 Housing Construction Performance." The system—adopted last year—entails releasing provisional figures each month and finalizing them the following September after incorporating any administrative updates. Last year, nationwide completions amounted to 300,000, which was 42,000 units (12.3%) less than the provisional figure of 342,000. The confirmed number of permits was 388,000, a 2.2% increase over the provisional figure, while confirmed housing starts ended at 272,000—down 0.2%.

If local government officials input administrative updates late, or if the number of units is changed after permits are granted, then figures are revised. In particular, completions showed the largest discrepancies due to duplicate counting, as temporary use approval and final use approval were counted as separate instances. Since last October, the Ministry changed its system to only count the first use approval as a completion, and expects the gap between provisional and confirmed numbers to decrease from this year’s statistics onward.

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