Non-Apartment Transactions Rise 16%...Supply Still Remains Scarce

Nationwide sales transactions for non-apartment housing surged more than 16% year-on-year over the five months ending last month, with prices also trending upward due to supply shortages. From January to May this year, the nationwide non-apartment sales transaction volume reached 71,729 units, a 16.1% increase from the same period last year, while jeonse (long-term lease) and monthly rent transactions also rose by approximately 11% to around 700,000 units. Demand appears to have shifted toward non-apartment housing due to a combination of apartment supply shortages and price burdens centered in Seoul.

As demand increased, row house prices also rose. According to the Korea Real Estate Board, row house purchase prices increased by 0.99% through May. Regionally, a clear polarization is evident: while row house prices in Seoul rose by as much as 3.37%, provincial areas saw a 0.38% decline, widening the gap between regions.

Despite the rise in demand, the supply of non-apartment housing is failing to keep pace. According to the Ministry of Land, Infrastructure and Transport (MOLIT), the number of non-apartment housing starts over the past three years (2023–2025) is only 20–30% of the 10-year average (2016–2025). Furthermore, cumulative starts in May this year stood at 12,358 households, a 5.5% decrease from the previous year.

MOLIT announced measures to expand non-apartment housing supply in May. The ministry plans to supply 90,000 purchased rental housing units in the metropolitan area by next year, concentrating 66,000 of these units in regulated zones in Seoul and Gyeonggi Province. Additionally, it unveiled plans to improve regulations to promote the supply of premium studio apartments and officetels. Kim Deok-rae, head of the Housing Research Division at the Korea Housing Institute, stated, "We need to resolve the contradiction where it is difficult to convert [vacant properties] into housing due to zoning regulations, even though there is an overflow of vacant commercial spaces."