98,235 Unsold Apartments Is Highest Number in Eight Years

The number of unsold apartments nationwide is nearing 100,000, which is close to the record set right before the Asian financial crisis.

Some expect that the record after the crisis will be broken because the number of unsold apartments is rising every month.

According to the Ministry of Construction and Transportation on November 18, the number of unsold apartments as of end of September is 98,235, the highest number in 8 years and 9 months since December 1998 (102,701).

Up to May this year, 70,000-80,000 apartments were left unsold, but the number rapidly increased, surpassing 90,000 at the end of July.

The degree of rise is also steepening, as the number of unsold apartments in September rose by 6,521 (7.1 percent) from the previous month.

Experts predict that the number of unsold apartments is likely to surpass 116,433, the record set in July 1998, right after the financial crisis, considering that a great number of apartments has been released into the market for sale to avoid price ceiling regulations on apartments.

The September rise consists of a 6,624 rise in private apartments and a 113 fall in public apartments. This raises the percentage of private apartments among the total number of unsold apartments to 99 percent.

The number of apartments unsold until the completion of construction also rose by 296 (2 percent) in a month, reaching 15,412. The category “Apartments Unsold Until Completion of Construction” is the biggest factor worsening the fiscal situation of construction companies. Most of the construction companies that went bankrupt recently were afflicted by this factor.

By region, the number has skyrocketed in the capital region, including Seoul, reaching 9,137 after a 57.1 percent (3,320) rise in a month.

In outer provinces, 3,201 (3.7 percent) apartments were added during the same period.

koh@donga.com