October Apartment Move-In Outlook Diverges Between Seoul Metropolitan Area and Other Regions

Seoul Metropolitan Area Up Sharply by 17.2 Points
Metropolitan Cities Down 6.3 Points; Provincial Areas Down 12.1 Points

The October Apartment Move-in Outlook Index showed a sharp divergence between the Seoul metropolitan area and other regions. The index rebounded significantly in the Seoul metropolitan area, driven by demand to switch from renting to buying in mid- to lower-priced apartment complexes in Seoul and Gyeonggi Province. In contrast, it plunged in other regions amid the effects of mounting unsold homes.

An apartment complex in Songpa-gu, Seoul. Photo by Kang Jinhyung.

A survey of housing construction companies by the Housing Industry Research Institute found that the nationwide Apartment Move-in Outlook Index stood at 82.6 this month, down 5 points. It has declined for three consecutive months since July.

The index measures the outlook for whether people who have purchased apartments will be able to move in after paying the remaining balance as scheduled. A reading above 100 means that more respondents have a positive outlook for the move-in market, while a reading below 100 indicates the opposite.

The trends in the Seoul metropolitan area and other regions diverged clearly. The index for the Seoul metropolitan area rose 17.2 points to 98.2, while those for metropolitan cities and provincial areas fell 6.3 points and 12.1 points, respectively.

Across the Seoul metropolitan area, the index rose sharply in every region: by 17.7 points in Seoul, 23.9 points in Incheon and 10.2 points in Gyeonggi Province.

The Housing Industry Research Institute said, "Expectations for the conditions surrounding move-ins to newly built apartments have increased as price gains spread among mid- to lower-priced complexes on the outskirts of Seoul and in southern Gyeonggi Province, while demand to switch from renting to buying has continued amid a shortage of homes available for lease." It added, "Incheon’s rise reflects a base effect following a sharp 18.5-point decline in the previous month."

Among metropolitan cities, the index declined by 18.9 points in Gwangju, 11.6 points in Busan and 4.5 points in Daejeon. Ulsan and Sejong were unchanged from the previous month at 100.

The Housing Industry Research Institute said, "Gwangju recorded the steepest decline, reflecting the short-term burden of absorbing supply as around 500 apartments are set to be completed in the Gwangju-Jeonnam area alone, including large-scale complexes in Buk-gu and nearby Jangseong in October." It added, "In Busan, views that conditions for selling existing homes and finding tenants would worsen were reflected in the index, as concerns about a surge in supply grew, with Gangseo-gu designated as an area under special management for unsold homes last month."

All provincial areas saw clear declines, including 20 points in South Gyeongsang Province, 18.2 points in North Jeolla Province and 14.7 points in South Chungcheong Province.

The Housing Industry Research Institute said, "Demand recovery in provincial areas remains slow, with unsold homes increasing for four consecutive months." It added, "The index also reflected concerns that homebuyers in provincial areas would have difficulty selling their existing homes or finding tenants to secure the funds for their final payments."

October Apartment Move-in Outlook Index. Korea Housing Industry Research Institute

Meanwhile, the nationwide apartment move-in rate last month was 68.2%, up 8.7 percentage points from August. The rate in the Seoul metropolitan area edged down 1%, while rates in the four major metropolitan cities outside the Seoul metropolitan area, as well as Gwangju and Sejong, rose 5.3 percentage points, and those in other regions rose 17.8 percentage points.

The Housing Industry Research Institute said, "In Seoul, the move-in rate remained high, in the mid-80% range, as continued price gains left conditions for selling existing homes relatively favorable." It added, "Across the Seoul metropolitan area, however, the ability to secure a loan for the final payment remains a major constraint on moving in, as lending regulations have been tightened."

Move-in rates rose substantially outside the Seoul metropolitan area, but remained around 60% in all regions. The largest increases were in the Gwangju-Jeolla region, at 20.2 percentage points, followed by the Daegu-Busan-Gyeongsang region, at 11.4 percentage points, and the Daejeon-Chungcheong region, at 10.5 percentage points.

Last month, around 3,000 apartments were scheduled for move-in in provincial areas, a decline of more than 40% from the previous month and the lowest level of the year. The most common reason for not moving in was failure to secure a loan for the final payment, at 37%, followed by delays in selling an existing home, at 31.5%; failure to find a tenant, at 14.8%; and delays in selling the apartment purchase right, at 5.6%. This pattern was similar to the previous month.

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