The Government Plans 920,000 New Homes — So Why Won't Prices Fall?

920,000 Homes — That's an Enormous Number

The government announced it will supply 920,000 public housing units in the Seoul metropolitan area. To put that in perspective, there are roughly 1.7 million apartments in Seoul total — so the plan is to add more than half that number from scratch. The announcement came as rental prices surged and public frustration grew. But experts are calling it unrealistic. Here's why.

How Long Does It Actually Take to Build Public Housing?

Public housing goes through a fixed sequence: announcement → land acquisition → design → permits → construction → completion. Even in the best case, that takes 5 years. More typically, it takes 7 to 10 years. That means the 920,000 units announced today won't be ready for residents until 2031 at the earliest — and more likely 2036. That does almost nothing to cool today's soaring rents.

So Why Does the Government Make These Announcements?

A supply announcement alone can shape expectations — landlords who believe more units are coming may hold back on raising rents, fearing future oversupply. The government is essentially trying to manage psychology as much as supply. The effect exists, but it's limited and short-lived without actual homes being built.

The Conditions for Real Buyers Haven't Changed

Government support for PF (project financing — loans that developers take out before construction, using future presale revenues as collateral) has given builders some breathing room. But for ordinary people who want to buy a home, the environment remains tough. Mortgage rates are high and lending rules are strict. For example: buying a 500-million-won apartment with a 70% loan (350 million won) at 7% interest means monthly interest payments of roughly 2.04 million won. Until that burden eases, real buyer demand is unlikely to recover.