Reality of 'Just Build': First-Half Non-Apartment Supply Shock, Only 20% of Target

South Korea's housing supply is facing a significant shortfall, with construction starts in the Seoul metropolitan area falling drastically short of government targets in the first half of the year. The situation has been described as a "supply shock," with actual housing construction slowing compared to both the three-year average and the previous year.

Data released on June 30 by the Ministry of Land, Infrastructure, and Transport revealed that only about 20% of the planned housing supply was initiated during the first half of 2023. This starkly contrasts with the government's stated commitment to boosting housing construction, famously encapsulated by a former presidential aide's directive to "just build." The current pace suggests a significant gap between policy pronouncements and the reality of housing development.

The slowdown is particularly concerning given the government's emphasis on increasing supply to stabilize the housing market. The figures indicate that the pace of new housing projects has not only failed to meet the ambitious targets but has also lagged behind previous years' performance. This raises questions about the effectiveness of current housing policies and the factors hindering faster construction.

Experts point to various potential reasons for the sluggish pace, including rising construction costs, regulatory hurdles, and difficulties in securing financing for new projects. The discrepancy between the government's stated goals and the actual output highlights the complex challenges involved in managing the nation's housing supply and ensuring adequate development to meet demand.