Apartment supply in South Korea rose sharply this year, but first-priority competition ratios for new housing applications fell to about half of last year's level. Analysts say demand has not disappeared but moved toward Seoul, third-phase new towns and complexes subject to the price cap on new homes, sharpening the gap between individual projects.
Zigbang analyzed complexes that issued occupant recruitment notices between Jan. 1 and Sept. 18 this year and found the average first-priority competition ratio for apartments nationwide was 5.6 to 1, the company said on the 6th. That is about half the 10.2-to-1 ratio recorded in the same period last year.
While presale volume increased, the number of applicants declined. General supply units totaled 85,321 this year, up 34% from a year earlier, but first-priority applications fell 26.6% to 475,009.
By supply type, public presales showed clear strength. Their average competition ratio was 19 to 1, more than four times the 4.4-to-1 ratio for private presales, as applicants concentrated on third-phase new towns and major housing districts in the greater Seoul area. Block A3 in the Namyangju Wangsuk 2 district drew a ratio of 126.8 to 1, while Wangsuk Atera recorded 105.5 to 1 and Block C27 in the Hwaseong Dongtan 2 district 100.6 to 1 — all in triple digits. Results also diverged sharply depending on whether the price cap on new homes applied. Complexes subject to the cap posted an average ratio of 10.8 to 1, about 2.9 times the 3.7-to-1 ratio for those not subject to it.
By region, the concentration in Seoul was most pronounced. The city's average first-priority ratio was 63.1 to 1, the highest in the country. Seoul accounted for just 2.8% of the nation's general supply units but drew 151,473 first-priority applications, or 31.9% of all applications. Acro Seocho in Seoul's Seocho district attracted 32,973 applicants for 30 general supply units, a ratio of 1,099.1 to 1 — the highest for any complex sold in the country this year.
Gyeonggi Province, by contrast, saw enthusiasm cool markedly from last year. Its average ratio fell to 5.3 to 1 from 11.4 to 1. The gap by developer type was also wide: private presales averaged just 1.6 to 1, while public presales recorded 21.1 to 1. In Incheon, demand concentrated on major complexes in Songdo and Geomdan, lifting the average ratio to 6.4 to 1 from 3.2 to 1 a year earlier. Outside the capital region, Beomeo Station Park Dream DIAR in Daegu's Suseong district was the only complex to post a triple-digit ratio, at 101.5 to 1. Average ratios in Jeju Special Self-Governing Province, Gangwon State, Busan and Ulsan all fell below 1 to 1.
Experts say the drop in the national average alone does not mean the market for new housing applications has slumped, because demand is moving more selectively toward complexes with proven price and location advantages.
"Supply rose 34% this year while applications fell 26.6%, so on the surface the 5.6-to-1 ratio looks like a chill that cut competition in half, but in reality demand did not disappear — it relocated," said Shin Bo-yeon, a professor of real estate AI convergence at Sejong University. "Public presales recorded 19 to 1 and complexes under the price cap 10.8 to 1, while those outside it managed only 3.7 to 1. Seoul supplied just 2.8% of the nation's general supply units yet absorbed 31.9% of all applications."
Shin also said the national average no longer represents any single region. "It is closer to reality to define this as the entrenchment of selective applications rather than a slump in the market," the professor said. "Even if average ratios fall further as autumn peak-season supply continues, it would be hard to read that as a contraction of the entire market as long as demand keeps concentrating on competitive complexes."
Instability in the lease market is also cited as a factor making applicants more cautious. "The more unstable jeonse — a lease system requiring a large lump-sum deposit instead of monthly rent — and monthly rent become, the more applying for new housing becomes the last route to housing stability," Shin said. "Today's selective applications are not the result of buyers having room to maneuver, but of them growing cautious because housing stability rides on a single choice." The professor added that it is as important to finely manage the volume and pace of supply in Seoul and in parts of the greater Seoul area with secured transit access — where actual demand is headed — as it is to increase supply overall.
An official at Zigbang also said that even if autumn presale volume increases, demand is unlikely to broaden overall and will instead keep concentrating selectively on complexes with strong locations, competitive presale prices and favorable surrounding supply conditions.
