In Uijeongbu, a city adjacent to Seoul, the number of unsold homes remains stubbornly high. With only a slight decrease in unsold units from six completed complexes over the past two months, the construction industry is concerned about the potential delays in future projects due to the inability to recover sales proceeds.
According to an analysis by Aju Economy on the status of unsold properties in Gyeonggi Province over the last three months (July to September), the number of unsold units in the six Uijeongbu complexes that were completed by the end of July decreased from 528 to 526 by the end of September, a mere 0.4% reduction. No units were sold in August.
Among these six complexes, five reported the same number of unsold units at the end of July, August, and September. The Hills State Hoeryong Station Parkview in Hoewon-dong consistently recorded 190 unsold units, which represents 28.2% of the total 674 units available for sale.
Other complexes, including Nikeville with 101 unsold units, and the mixed-use apartments Uijeongbu Station Daechang and Myungnam Doubleless with 90 and 63 unsold units respectively, continue to struggle. The Hills State Topsuk in Yonghyeon-dong has 40 unsold units. The Shin Dong-A Famille near Uijeongbu Station saw a slight decrease from 44 unsold units at the end of July to 42 at the end of August, maintaining that number by the end of September.
Despite the slow resolution of unsold units in these six completed complexes, the overall number of unsold homes in Uijeongbu increased from 526 at the end of August to 640 by the end of September. This rise was attributed to Gyeonggi Province reclassifying 114 previously unsold units at Harrington Place Uijeongbu Station from 'not completed' to 'completed.'
A representative from a mid-sized construction company stated, "One of the biggest risks in our business is not finding owners for homes we've worked hard to build. If it's our own project, our investment funds get tied up, and if it's a contracted project, the developer may not secure the sales proceeds needed to pay the construction costs. In any case, failing to recover invested funds on time negatively impacts future projects."
Adjusting prices to resolve unsold units also poses a burden for developers. Lee Eun-hyung, a researcher at the Korea Construction Policy Institute, noted, "Adjusting sales prices could lead to a stigma of 'housing price decline.' Construction companies have opted to maintain nominal prices while reducing option costs, but this ultimately erodes project profits."
The construction industry fundamentally requires liquidity, regardless of profitability, due to its upfront investment and subsequent settlement structure. Even if a company records a profit, delays in recovering sales proceeds or an increase in receivables can quickly lead to liquidity crises.
Kim In-man, director of the Kim In-man Real Estate Economic Research Institute, pointed out that measures to address unsold units have primarily focused on 'regional' issues. He emphasized, "In the metropolitan area, including Uijeongbu, the unsold unit problem is serious, yet support or measures to resolve it are lacking. We need to consider tax incentives such as a maximum 50% reduction in acquisition tax or exemptions from capital gains tax for one-household, one-home ownership."
* This article has been translated by AI.
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