"Market Concerns Over Real Estate Regulations"... Nationwide Apartment Move-in Outlook Declines in March

Seoul Projected at 100 After a 7.6-Point Drop

"Rapid Sales Listings Increase in the Three Gangnam Districts and Yongsan"

Nationwide Apartment Occupancy Rate Down 13.0 Percentage Points in February

Apartment complex in downtown Seoul. Photo by Yonhap News

The apartment move-in outlook index declined this month due to strengthened regulations in the housing market.

The Housing Industry Research Institute (HOSI) announced on March 12 that, according to a survey of housing project operators, the nationwide apartment move-in outlook index for March was 94.4, down 4.5 points from the previous month. This index measures expectations as to whether individuals who have purchased apartments will be able to successfully make their final payments and move in as scheduled. A reading above 100 indicates a positive outlook for the move-in market, while a score below 100 indicates a negative outlook.

By region, the index for the Seoul metropolitan area fell 3.8 points to 97.5, and for major metropolitan cities, it dropped 3.9 points to 100.0. In provincial areas, the index also declined, falling 5.3 points to 89.1. Within the metropolitan area, Seoul recorded the largest decrease, falling 7.6 points to 100.0. Incheon dropped 3.9 points to 92.5, while Gyeonggi Province remained unchanged at 100.0 compared to the previous month.

HOSI explained: "The market appears to have been affected by concerns over future tightening of housing regulations, including strengthened regulations on interim and final payment loans for new apartments, the confirmation of the end of the temporary suspension of higher capital gains tax rates for multiple homeowners, and the possibility of increased property holding taxes."

They added, "In particular, in Seoul, rapid sales listings have increased in high-priced housing areas such as the three Gangnam districts and Yongsan, leading to a slowdown or decline in price increases, which has also had an impact."

Among major metropolitan cities, Ulsan and Busan rose by 5.8 points and 5.0 points, respectively. In contrast, Gwangju dropped by 16.7 points to 83.3, while Daejeon and Daegu were also predicted to fall by 6.2 points and 4.2 points, respectively. Sejong was recorded at 114.2, down 7.2 points.

HOSI stated, "An increase in unsold apartments after completion and the lack of special measures to revitalize local economies appear to be having an effect. However, in the cases of Busan and Ulsan, the first week of March saw the highest nationwide increase in jeonse (long-term deposit rental) prices, and a shortage of jeonse listings is emerging, which is expected to positively affect the absorption of new apartment supply in those regions."

Among the provincial areas, Jeju and Gyeongnam saw slight increases of 1.2 points and 0.9 points, respectively. In contrast, Chungbuk and Gangwon each decreased by 9.1 points and 7.6 points, and Jeonnam also declined by 7.6 points.

Meanwhile, the nationwide apartment occupancy rate last month was 62.0%, a decrease of 13.0 percentage points from the previous month. The metropolitan area saw a slight decline of 0.2 percentage points to 82.4%, but the five major metropolitan cities recorded 60.3%, down 9.5 percentage points, and other regions fell 20.5 percentage points to 55.5%. Within the metropolitan area, Seoul saw a modest drop of 1.7 percentage points, while Incheon and Gyeonggi Province both rose by 0.5 percentage points.

The main reasons for non-occupancy were delays in selling existing homes (39.6%), failure to secure final payment loans (26.4%), inability to secure tenants (17.0%), and delays in selling pre-sale rights (9.4%).

This content was produced with the assistance of AI translation services.