Last month, the number of private apartment sales in South Korea reached its highest level in three and a half years. While supply surged, many analysts view this as a backlog of delayed projects rather than a true market recovery. However, there are signs of supply normalization as annual sales plans increase.
According to an analysis by Realhouse, a property evaluation firm, 24,315 private apartments were supplied nationwide in April, marking a 117.3% increase from March's 11,188 units. This is the largest monthly figure since October 2022 and represents an 83.3% rise compared to the same month last year.
The change is stark compared to earlier this year, with only 3,854 units in January and 5,342 in February. After recovering to over 10,000 units in March, April saw a leap past 20,000, indicating that previously delayed projects have finally come to market.
The increase was primarily driven by regional developments. Supply in other provinces surged by 203.7% to 11,831 units, significantly outpacing the 106.0% increase in the metropolitan area. Gyeonggi Province also saw the largest growth, with 8,125 units. New supply resumed in regions like Chungbuk, Gangwon, Ulsan, and Jeonbuk, where sales had effectively stalled.
This trend reflects a return of previously halted projects rather than new developments. Over the past two to three years, rising construction costs, financing difficulties, and unsold inventory pressures led many developers to delay sales. As financial burdens mounted, further postponements became untenable.
A representative from a mid-sized construction firm stated, "In regional markets, the longer projects are delayed, the greater the financial burden, forcing them to supply in the first half of the year. It's more about previously held inventory hitting the market than a recovery in demand."
The resumption of supply is seen as a normalization rather than an expansion. The increase in units comes from areas that had no supply last month, differing from a surge in new projects in specific regions.
However, the burden of unsold inventory remains a concern. According to the Ministry of Land, Infrastructure and Transport, approximately 30,000 units are unsold post-completion, mostly concentrated in regional markets. If supply continues to grow without sufficient demand, future sales schedules could be disrupted again.
Despite this, there are signs of improvement in supply trends. According to Real Estate R114, approximately 180,000 private apartment units are expected to be offered this year, an increase compared to last year, which faced significant supply shortages.
Another industry insider noted, "The increase in April's supply is significant as it indicates that stalled projects are starting to move again. However, we need to see if this supply continues into the second half of the year to assess market recovery."
* This article has been translated by AI.
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