The Ministry of Land, Infrastructure and Transport has belatedly identified that the 'Housing Statistics' release, which contains the current status of housing supply, omitted the 'year-on-year change' figures compared to the past 10 years. The Ministry has been disclosing annual housing permits, starts, sales (approvals), and completions, comparing the change rates to the average over the past 10 years. However, the data as of the end of last year was missing the relevant statistics. This led to criticism that the number only released compared to the extremely insufficient supply in 2023 caused a 'mirage effect' that made it appear as if housing supply had improved.
According to statistics calculated by ChosunBiz based on the 'Ministry of Land, Infrastructure and Transport Statistics Portal' as of the 22nd, the number of dwellings started nationwide last year was 305,331 units, a 40.3% decrease compared to the 10-year average (511,195 units). However, it showed a 26.1% increase compared to the previous year (242,188 units). In the release, the Ministry stated, "(The overall construction results for 2024) have significantly increased both in the metropolitan and local areas, centered on apartments with high preference," adding, "In particular, public housing starts have greatly increased compared to the previous year, and the expansion of project financing (PF) guarantees has also led to more than an 11% increase in private housing starts."
In the 'December 2024 Housing Statistics' release distributed on February 5 last year, the Ministry only disclosed 'year-on-year change' figures for supply, including annual housing starts, permits, sales, and completions. Up until December 2023, 'year-on-year change' was listed alongside '10-year change.' In the data from 2020 to 2022, both '10-year change' and '5-year change' figures were disclosed to assess the supply level of the given year compared to long-term averages of 5 to 10 years. Comparing only to the previous year can lead to misinterpretation of the supply situation due to base effects.
Last year, housing supply significantly decreased compared to the average of the past 10 years. Dwellings sold amounted to 231,048 units, a 32.3% decrease compared to the 10-year average (341,421 units). The number of permits was 428,244 units, down 24.3% from the 10-year average (565,564 units). The number of completions decreased by 7.7%, from 487,278 units to 449,835 units, based on the same criteria.
However, when comparing short-term changes to one year ago, different results emerged. Dwellings sold increased by 20.1% from 192,425 units in 2023 to 231,048 units last year. During the same period, completions rose from 436,055 units to 449,835 units, an increase of 3.2%. Permits slightly dropped from 428,744 units to 428,244 units, a decrease of 0.1%. Following the 'Legoland incident' in September 2022, real estate project financing (PF) issues and rising interest rates caused housing supply to fall into the worst situation in 2023. When comparing last year's supply statistics only to one year prior, the 'base effect' must be reflected.
In the real estate market, there has been unanimous criticism regarding the Ministry's omission of long-term supply statistics. The government agency in charge of housing policy provided inconsistent statistics, contributing to a lack of trust in the market. Some suggest that the intentional omission of long-term average statistics may have been influenced by forecasts of 'price increases' due to supply cliffs.
An industry source who requested anonymity noted, "The decrease in housing permits and starts signifies that the current reduction in supply may continue long term," adding, "Those in the construction industry, who rely on the statistics provided by the Ministry to plan projects, as well as housing consumers, can misinterpret the market situation."
Another anonymous source stated, "If it is a department responsible for housing supply policies, it should have rather informed the market of the 'supply cliff' for two consecutive years, raising awareness," and added, "It seems to consider the forecast that prices will rise due to insufficient supply."
The Ministry has stated that the format of the statistics changed from last year. A Ministry official remarked, "We decided to exclude 'year-on-year change' from the data starting from December last year, as it was uncomfortable to find in the release," adding, "If one utilizes the 'Ministry of Land, Infrastructure and Transport Statistics Portal' online, that statistic can still be derived." They also added, "Institutions that require the 10-year change statistics probably hold those figures separately."