Despite the government's efforts to expand the supply of newly constructed rental housing, actual construction starts remain at around 10,000 units annually, highlighting a serious supply bottleneck in the project stages.
On September 16, Bu Seung-chan, a member of the National Assembly from the Democratic Party, revealed data from the Ministry of Land, Infrastructure and Transport and the Korea Land and Housing Corporation (LH). According to the data, the total number of applications for LH's new rental housing program last year reached 288,317 units. However, the total number of construction starts for the same year was only 14,195 units, representing just 4.9% of the applications. It is analyzed that the actual rate of construction starts for new applications within the year is even lower, as the construction figures also include applications and agreements from the previous year.
The new rental housing program allows private developers to construct homes, after which LH signs a purchase agreement and buys the completed units to supply them as rental housing. The process involves reviewing location, design, land acquisition, and project feasibility before moving to the agreement and construction stages.
Of the 288,317 units applied for last year, only 90,634 passed the review, and 48,771 units had actual purchase agreements signed. Among the 155,886 units that failed the review, 73.0% (113,872 units) were rejected due to 'insufficient location conditions' and 'poor design quality.'
A more significant issue is that many units that successfully pass the review and sign agreements are still canceled later in the process. As of the end of July this year, 1,1755 units (13.5%) out of the 87,302 units that LH signed agreements for with developers in 2024-2025 have been canceled. The reasons for cancellation include 'land not secured' (5,563 units) and 'developer withdrawal' (3,552 units), which account for 77.5% of the total cancellations.
While the number of applications is abundant, there are repeated procedural bottlenecks in selecting viable project sites and linking agreements to construction.
Bu emphasized, "While over 280,000 applications are submitted, actual construction is limited to around 10,000 units annually, and even after securing agreements, many units are lost due to land issues or developer withdrawals. We must address the supply bottleneck that connects approved projects to actual construction and occupancy before simply accumulating target quantities."
On September 16, Bu Seung-chan, a member of the National Assembly from the Democratic Party, revealed data from the Ministry of Land, Infrastructure and Transport and the Korea Land and Housing Corporation (LH). According to the data, the total number of applications for LH's new rental housing program last year reached 288,317 units. However, the total number of construction starts for the same year was only 14,195 units, representing just 4.9% of the applications. It is analyzed that the actual rate of construction starts for new applications within the year is even lower, as the construction figures also include applications and agreements from the previous year.
The new rental housing program allows private developers to construct homes, after which LH signs a purchase agreement and buys the completed units to supply them as rental housing. The process involves reviewing location, design, land acquisition, and project feasibility before moving to the agreement and construction stages.
Of the 288,317 units applied for last year, only 90,634 passed the review, and 48,771 units had actual purchase agreements signed. Among the 155,886 units that failed the review, 73.0% (113,872 units) were rejected due to 'insufficient location conditions' and 'poor design quality.'
A more significant issue is that many units that successfully pass the review and sign agreements are still canceled later in the process. As of the end of July this year, 1,1755 units (13.5%) out of the 87,302 units that LH signed agreements for with developers in 2024-2025 have been canceled. The reasons for cancellation include 'land not secured' (5,563 units) and 'developer withdrawal' (3,552 units), which account for 77.5% of the total cancellations.
While the number of applications is abundant, there are repeated procedural bottlenecks in selecting viable project sites and linking agreements to construction.
Bu emphasized, "While over 280,000 applications are submitted, actual construction is limited to around 10,000 units annually, and even after securing agreements, many units are lost due to land issues or developer withdrawals. We must address the supply bottleneck that connects approved projects to actual construction and occupancy before simply accumulating target quantities."
* This article has been translated by AI.
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