NH Real Estate for March – Unsold housing units accumulating

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The author is an analyst of NH Investment & Securities. He can be reached at minjae.lee@nhqv.com — Ed.

In Jan 2023, the number of unsold apartments nationwide was 75,359. After having dropped to as low as 13,842 units in Sept 2021, the figure has now broken the previous record high (2013) in just 16 months. Given deteriorating real estate market conditions, the number of unsold apartments is highly likely to rise further this year. In this paper, we map out the degree to which the figure is set to increase.

In Jan 2023, unsold housing recorded 75,359 units. Assuming the addition of 25,000 unsold units out of the 59,000 units to be up for pre-sale after March, unsold housing in 1H23 is likely to exceed 100,000. Pre-sale volume for general supply should come to 26,000 units in the Seoul Metropolitan Area, 13,000 units in five, and 21,000 units in eight provinces. Pre-sale volume for general supply in some parts of Gyeonggi-do, Incheon, Daegu, Ulsan, Gyeongsanbuk-do, and Chungcheongnam-do (where subscription ratios are recently coming in at less than 0.5:1) is estimated at over 30,000 units.

Since most of the apartments that are slated for move-in in 2H23 were sold before 2021, their pre-sales prices are highly likely below sales prices. Therefore, difficulties are expected to be limited to delays in the move-in process due to high interest rates. However, considering recent sales price slippage, pre-sales prices for apartments slated for move-in this year will likely surpass sales prices.

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