New home construction falls to decade low: report

SEOUL, Jan. 16 (Yonhap) -- The real estate and construction market slump caused
the number of new homes built in South Korea to fall to record-low levels in
2008, a government report said Friday.
The Ministry of Land, Transport and Maritime Affairs said in a provisional report
that a total of 378,000 new homes were built last year, roughly 30 percent short
of the 500,000 units originally planned.
It said that the number, which includes 267,000 apartments, is the lowest tallied
on a annual basis in the last 10 years, and reflects the fallout of the weak real
estate market and drop in demand. In 1998, 306,000 homes were built nationwide
amid the Asian financial crisis.
The prices of most homes took a beating last year, with some neighborhoods
reporting almost no transactions.
The ministry said of the total, 132,000 homes were built in Seoul, Incheon and
Gyeonggi Province, areas that are home to half of the country's 48 million
people.
Experts said that the drop in demand has seriously hurt the country's
construction sector and could lead to a surge in prices down the road if supply
fails to meet demand. Construction accounts for 18 percent of the country's gross
domestic product.
yonngong@yna.co.kr
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