It was found that this year's dwelling presale volume in Seoul fell 40% from a year earlier. With the Seoul metropolitan area accounting for a majority for the third straight year, its share is growing.
According to a statistical analysis of dwelling presales (approvals) by the Construction & Economy Research Institute of Korea on the 28th, dwelling presale performance for January–October this year totaled 154,764 units. That is a 15.1% decrease from January–October last year.
By region, the provincial metropolitan cities posted the largest drop, down 42.7% on-year. The Seoul metropolitan area fell 9.1%, with Seoul in particular down 40.7%. Other regions rose 5.7%.
The sharp decline in Seoul's presale performance is due to a reduction in redevelopment project volume. An analysis by the institute of presale project sizes from January 2022 to October this year was found that redevelopment projects were the largest in scale.
Presale statistics tally the volume of projects with 30 units or more of multifamily dwellings that are subject to approval for tenant recruitment under the Housing Act. Through presale statistics, one can gauge changes in the supply market for multifamily dwellings, which are highly preferred by demand-side participants in the dwelling market.
The institute analyzed that, due to a downturn in provincial economies, the phenomenon of the Seoul metropolitan area's presale volume nearing 60% has continued for three consecutive years.
By regional share, the Seoul metropolitan area accounted for more than half at 58.4%. It was followed by other regions at 23.8%, and provincial metropolitan cities at 17.8%.
The main reasons for the steep decline in provincial metropolitan cities are cited as the continued recession this year, the expansion of the risk of unsold homes, and difficulties in financing. The share of provincial metropolitan cities in the overall market fell below 20% this year.
An official at the institute said, "We need to strengthen competitiveness in bidding for projects in the Seoul metropolitan area and maintenance and redevelopment projects," adding, "Because maintenance and redevelopment projects combine presale, rental, and cooperative association volumes through complex calculations depending on urban planning regulations, it is necessary to enhance capabilities to respond to mixed complexes and to develop differentiated products."