New unsold homes nationwide reach 10-year high in January

Apartment complexes in Seoul seen from Mount Namsan in central Seoul on Tuesday [YONHAP]

The number of new unsold homes nationwide in January reached the highest in more than 10 years amid the sluggish housing market, government data showed Tuesday.

According to the latest housing data released by the Ministry of Land, Infrastructure and Transport on Tuesday, the number of unsold homes totaled 75,395 across the nation as of the end of January, up 10.6 percent from a month earlier. This was the largest amount of new units unsold since November 2012, and far surpassed the level that the government considers a breaking point for the industry of 62,000 units.

By region, new unsold homes in the capital region increased by 10.7 percent from the previous month to 12,257 units, while the on-month increase was similar outside the capital region and rose 10.6 percent to 63,102 units.

Eighty-four percent of new unsold homes were concentrated outside the Seoul metropolitan area. Of them, the increased volume of new unsold homes in January stood out particularly in North Jeolla with 62.1 percent, North Chungcheong with 35.6 percent, Gangwon with 34.3 percent and North Gyeongsang with 20.2 percent. Among the greater capital area, Incheon had the highest increase with 28.7 percent.

By size, the number of larger units with floor space over 85 square meters (915 square feet) that remained unsold was 8,926 in January, up 25.9 percent from the month before. Smaller homes measuring 85 square meters or less increased by 8.8 percent from the previous month to 66,433.

In Korea, the listing of homes is typically made before construction — a tactic used by construction firms to raise funds to complete building projects. Homes across the nation that failed to find a buyer even after the completion of construction reached 7,546, up 0.4 percent compared to a month earlier.

The land ministry explained that the increase in new unsold homes in January is attributed to the increased lots sales in the October-to-December period of last year. New house supplies went from 65,000 units in the first quarter to 51,000 units in the second quarter, 72,000 units in the third quarter and to 99,000 in the fourth quarter in 2022.

New unsold homes are expected to increase for a while as supplies that were built when the housing market was hot will continue to be added throughout this year.

The government, however, assesses that the current level of unsold homes does not call for immediate state intervention. They believe areas that saw the most new unsold homes are in the outskirts or where sales prices are higher than the surrounding market prices.

“The current unsold homes can be largely resolved through self-rescue efforts such as price discounts by construction companies,” Land Minister Won Hee-ryong said in a press meeting on Jan. 30.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]