Private apartment supply in Korea's five major metropolitan cities and Sejong City is set to reach its highest level in six years, as construction companies resume projects previously delayed by market downturns.
According to Real Estate R114, the six cities—Busan, Daegu, Gwangju, Daejeon, Ulsan, and Sejong—plan to release 57,455 housing units this year, up 63% from the 35,194 units projected at the start of the year. While nationwide supply increased 43.6% to 269,303 units, the growth rate in these six cities significantly outpaced the national average.
Daejeon more than doubled its planned supply from 4,734 to over 10,000 units. Daegu will offer 8,480 units, its largest volume since 2022. Busan plans approximately 22,000 units—the most since 2017—while Sejong, which saw zero new supply in 2023-2024, expects 4,940 units this year.
The surge reflects developers cautiously resuming operations amid signs of market recovery. Despite persistent high interest rates and weak demand, unsold inventory has declined as rental market pressures intensify.
Ministry of Land, Infrastructure and Transport data shows unsold units across the five metropolitan cities fell 19.4% from 21,790 in October to 17,568 by end of January, as new supply outside Busan effectively halted after September. Daegu, which faced severe inventory problems, reduced unsold units by over 2,000 in three months. Ulsan's unsold inventory dropped by approximately 1,000 units to 1,632.
Rising jeonse (lump-sum deposit rental) prices are also driving new home purchases. KB Real Estate data shows the jeonse supply-demand index for the five metropolitan cities has exceeded 100 for 86 consecutive weeks since June 10, 2024, reaching 166.69 in the fourth week of February. A reading above 100 indicates demand exceeds supply.
Ulsan has seen jeonse prices rise 1.14% this year, driven by school districts and newer apartments. Sejong's jeonse prices climbed 1.25%—higher than Seoul's 0.96% over the same period.
"Housing costs including jeonse have risen significantly not only in Seoul and the capital region but also in provincial cities with good living conditions, stimulating actual demand," said Yoon Ji-hae, head of Real Estate R114's research lab.
Market observers note the Lee Jae-myung administration's balanced national growth strategy—reorganizing the country into five mega-regions and three special autonomous provinces—and signals of restrictions on non-resident single homeowners could positively impact regional housing markets.
However, experts emphasize that sustainable recovery in the five metropolitan cities requires job creation and improved living conditions. Despite tightening regulations on multiple-property owners, the significant gap in living standards between Seoul and provincial areas makes it unlikely that such owners would sell Seoul properties while keeping regional ones.
"Regulations on multiple-property ownership drove people toward owning 'one quality property,' which worsened provincial demand," Yoon said. "To reverse the concentration of capital and population in the Seoul metropolitan area, regions need to strengthen their own competitiveness rather than relying on demand suppression and its balloon effect."