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Korea’s Housing Supply: Issues and Resolutions

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  • 저자 송인호(宋仁豪)
  • 발행일 2019/08/26
  • 시리즈 번호 No. 275 (2019-04), eng.
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요약 ■ Korea’s housing supply ratio, based on the number of households, and housing stock, based on population size, are rising rapidly on the back of large-scale provisions of apartments.

■ The supply market, however, has become highly volatile, with sharp recurring ascents and descents, and the recent spike, in particular, has become a burden on the construction industry and housing market, among others.

- Following an unprecedented increase in the housing supply in 2015-2017―even by basic housingdemand standards―the number of unsold new housing has continued to rise as the supply of housing completions and move-ins continue to enter the housing market.

ㆍThe increase in unsold new housing after completion could negatively impact the financial soundness of construction firms as well as housing finance-related institutions.

- In addition, a reverse-jeonse phenomenon is expected this year, in which tenants may possibly encounter cash flow problems while landlords face growing pressure as they deal with increasing difficulties in finding new tenants and returning jeonse deposits on time.

■ Therefore, efforts are needed from the government in seeking measures to curb the volatility in the housing supply.

- Construction firms should be bound by a higher equity burden and housing finance-related institutions should be more specialized and have more responsibility.

- A demand-centric housing supply system, which can meet the needs arising from social change, including low birth rates, population aging and increasing single-person households, is required.
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