Housing permits and construction starts, both leading indicators of future supply, are recovering quickly in South Korea. Permits issued in Seoul in August were more than seven times the level of a year earlier. At the current pace, the annual total is expected to exceed the 10-year average. Construction starts are also proceeding on target, suggesting completions will surpass the long-term average from 2028.
Seoul issued permits for 11,306 housing units in August, according to monthly housing data released by the Ministry of Land, Infrastructure and Transport on the 30th. That marked a 604.4% surge from 1,605 units in the same month last year. Apartment permits totaled 10,537 units, up 938.1% from 1,015 units a year earlier. Cumulative permits for January through August came to 39,940 units, a 40.4% increase from 28,441 units in the same period last year.
The rebound in Seoul permits extended beyond apartments to other housing types. Permits for general housing in Seoul totaled about 5,900 units in the first eight months of the year, up 60.7% from roughly 3,700 units a year earlier, the ministry said. The gains appear to reflect policies that eased construction rules and expanded funding support and public purchases of new homes. "Thanks to the government's easing of construction regulations and its package of financial and tax support, permits — a leading indicator of supply — have shown a clear improvement trend, centered on Seoul and other regulated zones," a ministry official said.
The government attributes the improved business environment to an expansion of advance purchase agreements for newly built homes announced in May, regulatory changes for urban-life housing and officetels — studio units used as either homes or offices — and the urban and building deregulation along with financial and tax support included in the Aug. 13 supply measures. Supplementing purchase demand and easing financial rules have 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. If the current pace holds, the city is expected to exceed the annual long-term average of 63,000 units by year-end.
Efforts by local governments to process permits quickly also contributed, the ministry said, adding that central and local governments will continue to cooperate to keep approvals moving at the current speed. The ministry said it will also work to ensure that increased permits and construction starts translate into completed homes.
Housing construction starts in Seoul totaled 1,172 units in August, up 14.6% from 1,023 units a year earlier. Cumulative starts for January through August reached 20,679 units, a 41.1% increase from 14,654 units in the same period last year. Starts for general housing in Seoul also rose 67.7% on a cumulative basis through August, to about 5,000 units this year from roughly 3,000 units last year.
The ministry views the rise in permits and construction starts as a positive signal for future supply, even as completions — the basis for move-ins — have declined. "If construction starts proceed without disruption on the units already permitted, completions will exceed the long-term average from 2028," a ministry official said.
