The supply of new private apartments in South Korea is projected to fall below 150,000 units (160,000 including unconfirmed projects) in 2025. (Image courtesy of Yonhap)
SEOUL, Dec. 26 (Korea Bizwire) — The supply of new private apartments in South Korea is projected to fall below 150,000 units (160,000 including unconfirmed projects) in 2025, marking the lowest level since 2000, according to industry analysts. This dramatic decline is attributed to a complex mix of factors, including rising construction costs and policy implementation challenges.
While 2024 has maintained relatively stable supply levels, buoyed by what industry observers call a “new construction fever” particularly in Seoul, the outlook for 2025 appears significantly more challenging. The situation has raised concerns about potential housing shortages, as overall housing completion rates are expected to decline from 2026 onward.
According to a joint survey conducted by Yonhap News Agency and Real Estate R114 on December 25, examining 25 major construction companies’ plans, 2024′s private apartment market achieved a relatively healthy supply rate of 83.7%, delivering 222,173 units out of the planned 265,439. This marks the highest completion rate since 2020′s 91.7%.
Regional performance varied significantly, with the Seoul metropolitan area achieving 89% of planned supply, while major cities and other regions reached 75% and 78% respectively. Notably, Sejong failed to deliver any of its planned 421 units.
Approximately 36,231 units originally scheduled for 2024 have been postponed to 2025, representing 33% of next year’s total planned supply of 146,130 units. The postponed projects are almost evenly split between the Seoul metropolitan area (50.1%) and other regions (49.9%), though regional projects are showing increased strain compared to the previous year.
The top 10 construction companies have significantly reduced their supply plans for 2025, projecting only 107,612 units, about 69% of their 2024 level. Six companies plan to reduce supply, three will maintain current levels, and only one plans an increase.
The composition of new projects is also shifting, with self-directed developments (including contracted projects) accounting for 53% (77,157 units) and reconstruction projects (including remodeling) making up 47% (68,973 units) of planned supply.
Industry experts note that the projected supply decrease stems from multiple factors: rising raw material costs, increased labor expenses, environmental regulations, insufficient policy implementation, and general economic conditions have all contributed to the downturn.
These challenges are creating what many see as a perfect storm for the construction industry.
A Real Estate R114 representative warned that the 2025 apartment market faces unprecedented challenges beyond typical market cycles, suggesting structural issues that could lead to a prolonged market downturn.
“To ensure stable supply, the government and construction industry must discuss practical cost adjustment measures,” the representative stated, emphasizing the importance of consistent policy execution to restore market confidence.
M. H. Lee (mhlee@koreabizwire.com)
