Due to the construction and real estate market recession, the number of dwellings sold by medium-sized construction companies in the first quarter of this year was the lowest in 16 years.
According to the Korea Housing Association (KHA) on the 11th, the total number of medium-sized dwellings sold in the first quarter (January to March) was 4,812 units. This is the lowest number in 16 years for the first quarter, compared to 3,251 units in 2009.
The number of medium-sized dwellings refers to the approximately 500 units of multi-family housing supplied by construction companies ranked outside the top 60 in the Ministry of Land, Infrastructure and Transport's construction capability assessment.
The supply performance in the first quarter of this year decreased by 74.8% compared to 19,075 units in the first quarter of last year. Compared to 24,693 units in the fourth quarter of last year, it represents an 80.5% decrease.
The significant decline in dwellings sold by medium-sized construction companies is attributed to their large share of local sales sites, where the real estate market downturn has particularly intensified the issue of unsold units in regional areas.
As of the end of March, the total number of unsold dwellings nationwide was 68,920 units, a 6.1% increase compared to the same period last year. Among these, unsold dwellings in regional areas accounted for 76.0% (52,392 units).
The phenomenon of lower recognition for dwellings from relatively unknown medium-sized construction companies, amid concentrated demand for sales centered around large construction brands in the metropolitan area, is also analyzed as a factor in the sharp decline in sales performance.
In addition to uncertainty following the impeachment, small and medium-sized construction companies are postponing their sales schedules. The planned supply for the first quarter of this year was recorded at 8,038 units, down 80.4% from 41,007 units during the same period last year. The preliminary planned supply for this month (1,615 units) also decreased by 72.8% (4,329 units) compared to the same period last year.
From January to this month, among the 17 cities and provinces nationwide, the average number of regions with sales plans was 6.2 per month. In particular, Gwangju, Ulsan, and Sejong have had no planned sales volume in the five months since the beginning of this year.
In the medium-sized housing industry, there are calls for the government to provide institutional support to improve the performance of small and medium-sized construction companies and to revitalize the regional sales market.
A KHA official noted, "The housing market recession is severe, and since many members are regional companies, the overall sales performance has significantly decreased," adding, "Currently, the government's measures for unsold units lack supply-boosting measures, so we are continuing to propose tax or financial support measures, including exemption from capital gains tax for five years when purchasing unsold dwellings in regional areas."