In the first half of this year, nationwide housing starts and pre-sales increased from a year earlier. By contrast, permits, a leading indicator of new projects, and completions, which reflect actual move-in volume, showed weak trends. In Seoul, where the supply crunch is severe, supply indicators moved similarly to the national pattern, but apartment starts declined.
The problem of unsold homes worsened, mainly in the provinces. Unsold units after completion, classified as malignant unsold inventory, neared 30,000 households.
According to the Ministry of Land, Infrastructure and Transport's "June housing statistics" on the 31st, nationwide dwelling permits totaled 116,611 households in January–June, down 15.8% from the same period a year earlier. During this period, starts were 118,005 households, up 14.4%, and pre-sales were 109,186 households, up 60.7%. However, completions plunged 49.5% on-year to 103,735 households.
Looking only at June, nationwide permits totaled 17,917 households, down 36.1% from a year earlier. Starts also fell 18.1% to 23,638 households. Completions decreased 61.1% to 15,592 households. Only pre-sales increased, up 52.4% to 22,838 households.
Dwelling supply proceeds in the order of permits, starts, pre-sales, and completions. In the first half, these stage-by-stage supply indicators diverged. Increases in starts and pre-sales mean existing projects are gaining speed. However, with permits continuing to fall, there are concerns that future starts and move-in volumes will decline. Completions also plunged, reducing the number of new dwellings available for move-in.
◇Seoul sees more non-apartment starts and fewer apartment starts in first half
In Seoul, permits and completions decreased, while starts and pre-sales increased. First-half permits stood at 20,655 households, down 9.8% on-year, with apartment permits plunging 19.5% to 16,377 households.
Starts improved mainly for non-apartments. First-half starts rose 2.0% to 13,121 households. However, looking only at apartments, starts fell 12.2% to 9,421 households.
Pre-sales in Seoul jumped 110.0% to 13,773 households. By contrast, completions fell 52.1% to 15,160 households, and apartment completions decreased 58.4% to 12,251 households.
In the greater Seoul area, which combines Seoul, Incheon, and Gyeonggi, first-half permits were 67,946 households, down 8.1% on-year. Starts edged down 0.7% to 65,204 households, staying near last year's level. By contrast, pre-sales rose 55.1% to 63,586 households, driven by increases of 110.0% in Seoul and 117.8% in Incheon. Completions fell 47.6% to 52,925 households.
In the provinces, first-half starts rose 40.7% on-year to 52,801 households, and pre-sales increased 69.0% to 45,600 households. Large-scale projects in select areas such as South Chungcheong, North Gyeongsang, and South Jeolla boosted starts. By contrast, permits dropped 24.5% to 48,665 households, and completions fell 51.4% to 50,810 households.
◇Excluding Seoul, home sales rise in the greater Seoul area and provinces… malignant unsold inventory at 30,000 households
Last month, nationwide dwelling sale transactions totaled 68,819, up 3.5% from the previous month. Compared with a year earlier, they fell 6.8%. Cumulative transactions in January–June were 396,274, up 10.6% on-year.
By region, sales transactions increased in both the greater Seoul area and the provinces, but declined in Seoul. Sales transactions in the greater Seoul area rose 1.6% from the previous month to 39,078, and the provinces increased 6.2% to 29,741. Total dwelling transactions in Seoul fell 14.5% from the previous month to 12,094. Apartment transactions in Seoul also declined 13.5% to 7,742.
Jeonse and monthly rent transactions totaled 218,618, up 4.2% from the previous month but down 9.8% from a year earlier. The greater Seoul area rose 5.2% month over month to 146,810, and the provinces increased 2.3% to 71,808. Seoul's jeonse and monthly rent transactions climbed 8.3% from the previous month to 67,976.
In the first half of this year, monthly rents accounted for 68.4% of all jeonse and monthly rent transactions, up 7.0 percentage points from the same period last year. In Seoul, the share of monthly rents reached 69.8%.
Unsold dwellings increased again. At the end of June, nationwide unsold dwellings totaled 67,464 households, up 3.4% from the previous month. Of these, unsold after completion, known as malignant unsold inventory because they remain uncontracted even after construction, rose 1.5% to 29,786 households.
Unsold inventory in the greater Seoul area rose 0.9% from the previous month to 18,770 households, and the provinces increased 4.4% to 48,694 households. Of the 2,225 increase in nationwide unsold units over the month, 2,056 households, or 92.4%, occurred in the provinces.