[Daegu = E-Daily Reporter Jeong Yun-ji ] On the 5th, two days after the government announced its real estate tax reform plan, in front of Sangin Prugio Center Park in Sangin-dong, Dalseo-gu, Daegu. The area in front of this large apartment complex, comprising 990 units, was surprisingly quiet, even for a weekday morning. At the main entrance, a large “Directions to the Sales Office” sign had been installed in place of a banner congratulating new residents, and traces of construction work remained in various places.
Upon entering the complex, it was hard to believe that residents had recently begun moving in. Half of the buildings—Blocks 101 through 109—were still waiting for their owners, with protective tape still covering the entrance doors. Looking inside through the glass of the common entrance, protective coverings made of sturdy cardboard were still attached to the front doors. Ms. Jang (65), who lives in the apartment across the way, said, “I thought the area would liven up now that this large complex had been built, but since there’s no one around, nothing has changed—not even on weekends or during rush hour.”
So-called “chronic unsold units” (unsold units after completion) are weighing down the regional real estate market. In Daegu, which has the highest number of unsold units after completion nationwide, discounts on new apartment sales have become the norm. There are also a growing number of cases where units are converted to jeonse or monthly rent, or where construction is halted because no buyers can be found. As the unsold inventory crisis drags on, transactions are shrinking not only for new apartments but also for existing ones. With the rise in housing prices coming to a halt, local residents unanimously remarked, “Housing prices in Seoul are someone else’s problem.”
Newly built apartments with discounted prices and even “ma-pi” (price cuts)… Apartments priced like studio apartments
Sangin Prugio Center Park is a complex that symbolizes Daegu’s unsold housing crisis. Completed in 2024, this apartment complex went on public sale in November of the same year, but only about 50 out of 990 units received subscription applications. The sale price for a unit with an exclusive area of 84 square meters was 630 million won. After being left vacant for a year as a “ghost apartment complex,” the developer ultimately opted to convert a portion of the unsold inventory into jeonse (long-term lease) units using a Corporate Restructuring (CR) REIT. Currently, tenants are moving into jeonse units primarily in Buildings 105–109. The developer plans to accept jeonse tenants for the remaining half of the units in the second half of this year.
The situation was much the same in the Bon-dong area, about a 20-minute drive from Sangin-dong. Local real estate agents noted that the area around the nearby intersection is “known even in Daegu as a neighborhood plagued by chronic unsold units.” This is because both the Dalseo Lotte Castle Central Sky Apartments (481 units, 48 commercial spaces) and The Sharp Dalseo Cent-Elo (272 units) remain unsold. Construction on The Sharp Dalseo Cent-Elo, originally scheduled for occupancy in June of this year, was suspended once due to sluggish sales and has only recently resumed.
On the first floor of the Biliv Classe shopping center, located on a major road at an intersection, stood a large sales promotion center for the Lotte Castle Central Apartments. Huge banners reading “Unprecedented Discounts” and “Complex Benefiting from Unsold Units After Completion” were hung on the building’s exterior, and the sales center was filled with details on various incentives, such as a 16% discount on the sales price and a two-year deferral on the final payment.
However, despite these extraordinary terms, visitors were few and far between at both the sales center and the resident services office right next door. An official from a licensed real estate agency in Bondong noted, “At Dalseo Prugio Signature, about a 15-minute walk from here, there are even urgent sales listings at a ‘negative premium’—70 million won below the original sales price.”
In some cases, newly built apartments are being rented out at monthly rates comparable to those of studio apartments. Hillsteak Seodaegu Station Central (762 units, 75 rooms) in Bisan-dong, Seo-gu, was completed last July, but its pre-sale rate has not even reached 30%. The developer eventually converted the unsold units into rental properties, offering a 84-square-meter unit with three bedrooms and two bathrooms for a security deposit of less than 30 million won and a monthly rent of 600,000 to 900,000 won. An official at Real Estate Agency A in the area said, “For a newly built unit of the same size in Daegu, the monthly rent would typically exceed 1 million won,” adding, “Since we’re offering these units for rent under such exceptional terms, we’re mainly receiving inquiries from younger people.”
This trend is not limited to Daegu. According to the “June Housing Statistics” released by the Ministry of Land, Infrastructure and Transport on the 31st of last month, the number of unsold homes nationwide stood at 67,464 units, a 3.4% increase from the previous month. While there were 18,770 unsold units in the Seoul Metropolitan Area, 48,694 were recorded in other regions, indicating that the increase in total unsold units was driven by the provinces. Nationwide, there were 29,786 unsold units after completion, with Daegu having the highest number at 3,575. This was followed by Busan (3,292 units), South Gyeongsang Province (3,226 units), North Gyeongsang Province (2,973 units), South Chungcheong Province (2,372 units), and Gangwon Province (1,275 units), with the figures concentrated in regional areas.
While Seoul’s housing prices rise, Daegu’s fall… “Chronic unsold inventory disrupts the market”
These unsold units are affecting not only newly built complexes but also the existing apartment market. As construction companies offer discounted sales and various financial incentives, existing apartments are losing their relative price competitiveness, further shrinking transaction volumes.
Actual housing price trends also show a stark contrast. According to the monthly sales price index change rates for January through June released by the Korea Real Estate Board, while Seoul and the nation’s overall housing sales prices continued to rise every month in the first half of this year, Daegu recorded a decline for six consecutive months. In June, Seoul rose 1.03% from the previous month, while Daegu fell 0.08%.
As a result, Daegu residents unanimously agreed that the real estate markets in Seoul and the provinces are like two different worlds. Mr. Hwang (67), a resident of Sangin-dong, said, “I’m worried because homes in Daegu just won’t sell,” adding, “Since new apartments are being sold at a discount, older units can’t even fetch their original asking price.” Choi Jin-cheol (55), whom we met near Jungang-ro Station in Daegu, lamented, “I need to sell my house to secure funds for retirement, but even when I list it as a distressed sale, there are almost no inquiries,” adding, “They say housing prices are rising in Seoul, but it’s a completely different world here.”
Mr. B, a man in his 60s who has been running a real estate agency in Sangin-dong for five years, said, “Many customers come to inquire but end up waiting because they think prices will drop further,” adding, “Since properties with ‘price cuts’ keep appearing, it’s only natural from the customers’ perspective.”
Experts point out that this phenomenon goes beyond simply leaving unsold units on the market; it is distorting the regional real estate market as a whole. Song Won-bae, Vice President of the Daegu-Gyeongbuk Chapter of the Korean Real Estate Society, stated, “Chronic unsold units create a vicious cycle where surrounding apartment prices and jeonse (lump-sum deposit) rents fluctuate together, eventually leading to reverse jeonse, which disrupts the local real estate market,” and “As housing prices in Seoul continue to rise while asset values in the provinces fall, the mindset of ‘I’m moving to Seoul too’ is bound to grow,” he noted, adding, “If unsold units in the provinces persist for a long time, it could ultimately fuel the concentration of population in the Seoul metropolitan area.”
However, some argue that it cannot be generalized that unsold units are dragging down Daegu’s overall housing prices. Lee Young-min, President of the Daegu Metropolitan City Chapter of the Korea Association of Licensed Real Estate Brokers, explained, “Unsold units are often concentrated in complexes with relatively poor locations, so their impact on housing prices in prime areas is limited,” adding, “In fact, most areas with unsold units are those with poor access to major job centers and a weak demand base.”
Chairman Lee added, “However, existing apartments in nearby areas with similar locations to these unsold complexes will inevitably be affected by the discount pricing of new construction units,” noting, “Ultimately, the polarization of housing prices between core areas and less desirable areas within Daegu is likely to intensify further.”
