Apartment Move-in Outlook for July Also Gloomy... "Buyer Sentiment Expected to Weaken"

Index Declines for Three Consecutive Months
Due to Interest Rate Hikes and Economic Recession
Buying Sentiment Weakens
Top Reason for Unsold Homes
Delay in Selling Existing Houses

July Apartment Move-in Outlook Index / Data provided by Korea Housing Industry Research Institute

[Asia Economy Reporter Hwang Seoyul] Due to interest rate hikes and concerns over an economic recession, buying sentiment is expected to weaken, leading to a negative outlook on apartment move-ins for the third consecutive month. As the proportion of respondents citing 'delays in selling existing homes' as the reason for non-occupancy has significantly increased amid a transaction freeze, voices calling for measures such as revitalizing housing transactions are emerging.

According to the Korea Housing Institute (hereinafter KHI) on the 15th, the apartment move-in outlook index for July is forecasted to drop 4.3 points from last month (72.6) to 68.3. KHI analyzed that this is because, amid the U.S. signaling an aggressive interest rate hike (giant step) in July to counter inflation, a big step hike is also anticipated in Korea, leading to concerns over an economic recession and increased loan costs, which are expected to dampen homebuyers' purchasing sentiment.

The apartment move-in outlook index was developed to proactively respond to changes in the housing supply market and is surveyed among members of the Korea Housing Association and the Korea Housing Builders Association.

Despite some adjustments lifting restrictions on regulated areas and speculative overheated districts starting this month, Daegu, Daejeon, Jeonnam, and Gyeongbuk are predicted to see a worsening move-in outlook. Daegu (52.0) fell 5.6 points from last month, Daejeon (76.4) dropped 1.3 points, Jeonnam (68.7) declined 12.2 points, and Gyeongbuk (66.6) decreased by 7.0 points. Only Gyeongnam (75.0) responded that it would improve by 6.6 points.

The Seoul metropolitan area recorded 71.0, down 7.9 points from last month (78.9), metropolitan cities outside the capital fell 0.2 points to 68.8, and provinces excluding metropolitan cities dropped 6.1 points to 66.9.

The nationwide occupancy rate in June (82.3%) decreased by 0.1 percentage points compared to May. Reasons for non-occupancy were delays in selling existing homes (41.2%), failure to secure tenants (33.3%), and failure to secure final payment loans (25.5%), in that order. Notably, the reason of delays in home sales increased by 9.7 percentage points from the previous month (31.5%). KHI suggested, "To prevent a decline in occupancy rates, measures such as revitalizing housing transactions and expanding and strengthening loan support for the homeless are necessary."

Last month, the occupancy rate in the Seoul metropolitan area (86.7%) decreased by 2.7 percentage points from the previous month (89.4%). Metropolitan cities outside the capital fell by 0.4 percentage points from May to 82.9%, while provinces excluding metropolitan cities rose by 1 percentage point to 80.4%.

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