Housing permits and construction starts, both leading indicators of future supply, are rebounding quickly as the government pushes for faster housing supply to stabilize the property market. Permits issued in Seoul in August rose more than sevenfold from a year earlier, and if the current pace holds, the annual total will exceed the average of the past decade. Construction starts are also proceeding on target, meaning completions should surpass the long-term average from 2028.
Seoul issued permits for 11,306 housing units in August, up 604.4% from 1,605 units in the same month last year, according to August housing statistics released by the Ministry of Land, Infrastructure and Transport on the 30th. Apartment permits totaled 10,537 units, a 938.1% increase from 1,015 units a year earlier. Cumulative permits for January through August reached 39,940 units, up 40.4% from 28,441 units in the same period last year.
The recovery extended beyond apartments to other housing types. Permits for non-apartment homes in Seoul totaled about 5,900 units in the first eight months of the year, up 60.7% from about 3,700 units a year earlier, the ministry said.
The government attributed the increase to policies that eased construction rules and expanded financial support and public purchases of new homes. "Thanks to the government's easing of construction regulations and its financial and tax support package, permits — a leading indicator of supply — are showing a clear improvement, centered on Seoul and other regulated areas," a ministry official said.
The government credits several measures with improving business conditions: an expansion of agreements to purchase newly built homes announced in May, regulatory changes for urban-living housing and officetels — studio units used as either homes or offices — and the urban and building deregulation plus financial and tax support included in the Aug. 13 supply package. Supplementing purchase demand and easing financial rules improved conditions for developers launching new projects, the ministry said. Seoul's cumulative permits for January through August stood at 106% of the 2016-2025 long-term average of 38,000 units, and if the pace continues, the annual figure should exceed the long-term average of 63,000 units by year-end.
The ministry said efforts by local governments to process permits quickly also contributed, and pledged that central and local authorities would continue cooperating to maintain the current speed. It also plans to work on converting permits into actual construction starts and completions. "The prime minister chairs a rapid-supply council, and we also operate on-site permitting and field support centers, so we plan to concentrate all our capabilities on supplying as many homes as possible as quickly as possible," a ministry official said.
Construction started on 1,172 housing units in Seoul in August, up 14.6% from 1,023 units a year earlier. The cumulative total for January through August came to 20,679 units, a 41.1% increase from 14,654 units in the same period last year. Starts on non-apartment homes in Seoul also rose 67.7%, to about 5,000 units in the first eight months of this year from about 3,000 units a year earlier.
While completions, which determine move-in supply, have declined, the ministry views the rise in permits and construction starts as a positive sign for future supply. "If construction on permitted units proceeds without disruption, completions will also exceed the long-term average from 2028," a ministry official said.
