14,000 Households Move In October in Seoul and Gyeonggi... "New Construction Insufficient to Solve Jeonse Crisis"

20,987 Nationwide Housing Units for Move-in... 30% Decrease Compared to Previous Month
Seoul Metropolitan Area Units Slightly Increase but Due to Base Effect

Apartment view in Songpa-gu, Seoul / Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Onyu Lim] As the jeonse (long-term lease) shortage in the Seoul metropolitan area, including Seoul and Gyeonggi, worsens, the supply of apartment move-ins this month is expected to decrease for the third consecutive month, dropping by 30% compared to the previous month.

Although the outlook for the move-in market is improving due to the autumn moving season and base effects, the outlook remains below the baseline for eight consecutive months due to government regulations and the prolonged impact of the novel coronavirus disease (COVID-19).

According to the Korea Housing Industry Association (KHIA) on the 15th, the nationwide scheduled apartment move-in volume for October is 21,987 households, a 30% (9,456 households) decrease from the previous month.

By supply entity, the private sector will supply 12,617 households across 22 complexes, and the public sector will supply 9,370 households across 13 complexes. The private sector's supply decreased by 10,199 households compared to the previous month, while the public sector's supply increased by 743 households.

By region, 22 complexes with 13,951 households will move in within the Seoul metropolitan area, including Seoul and Gyeonggi, while 13 complexes with 8,026 households will move in the provinces. The metropolitan area includes 2,807 households in Seoul, 9,998 in Gyeonggi, and 1,146 in Incheon. Busan is expected to have 2,662 households, Chungnam 1,707 households, and Daegu 1,395 households moving in.

The nationwide move-in volume has sharply decreased for three consecutive months, from 41,154 households in July to 38,261 in August, 31,443 in September, and 21,987 in October. In the Seoul and Gyeonggi areas, the numbers were 23,362 households in July, 22,725 in August, 10,100 in September, and 12,805 in October. Although there was a slight increase compared to September, it still falls short of July and August levels. Amid the intensifying jeonse shortage, the supply of jeonse from new move-ins is also not easy.

The nationwide Housing Occupancy Sentiment Index (HOSI) forecast for this month is 75.3, remaining in the 60-70 range for eight consecutive months but rising by 5.7 points compared to the previous month. KHIA analyzed that "the forecast slightly increased due to the arrival of the autumn moving season and base effects."

HOSI is an index that comprehensively assesses the move-in conditions of complexes that are about to move in or are currently moving in from the perspective of suppliers. It is surveyed monthly among housing developers and other housing business operators. The baseline is 100; a value above 100 indicates favorable move-in conditions, while below 100 indicates unfavorable conditions.

An increase in move-in volume can be expected to have positive effects such as stabilizing jeonse prices, but regions with a rapid short-term increase may face risks such as sharp drops in jeonse prices, reverse jeonse shortages, and the insolvency risk of housing developers.

Gyeonggi Province recorded the only score above 90 at 90.3, while Seoul (89.1), Chungbuk (84.6), and Gyeongbuk (80.0) were in the 80s. Most other regions, including Incheon (79.4), Daegu (79.3), Gwangju (77.2), and Sejong (76.4), remained in the 60-70 range.

KHIA stated, "Due to the prolonged impact of COVID-19, the index has hovered in the 60-70 range for eight months, and the deterioration of move-in conditions is expected to continue in most regions in October."

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