September Move-in Outlook Worst Ever: "Can't Sell Existing Homes, So Can't Move to New Ones"

September Apartment Move-in Outlook Index 47.7
Worsened by 21.9 Points from Last Month
"Lowest Nationwide and Regional Indexes"
August Nationwide Move-in Rate Also ↓ from Previous Month
Delay in Existing Home Sales is Top Reason

Source=Korea Housing Industry Institute

[Asia Economy Reporter Hwang Seoyul] Apartment move-in prospects this month are predicted to be the worst since the survey began. Last month, the top reason for non-occupancy was delays in selling existing homes, indicating that the stagnation in housing transactions is leading to a decline in occupancy rates.

According to the Korea Housing Industry Association (KHIA) on the 21st, the apartment move-in outlook index for September is expected to worsen by 21.9 points from the previous month to 47.7. The metropolitan area is forecasted to drop by 14.8 points (66.4→51.6), major cities by 20.4 points (63.7→43.3), and other regions by 25.7 points (75.2→49.5). The nationwide and regional indices have recorded their lowest levels since the survey began.

The apartment move-in outlook index is a metric that surveys housing business operators on their expectations for move-in performance. Based on 100, a score above 100 indicates a majority of respondents have a positive outlook, while below 100 indicates a majority have a negative outlook.

KHIA analyzed, "This is expected due to concerns over an economic downturn caused by rapid short-term interest rate hikes, increased loan cost burdens, and falling housing prices, which will deepen the real estate transaction freeze."

In the metropolitan area, Incheon (54.5→39.2) is expected to deteriorate rapidly, while outside the metropolitan area, Daejeon (66.6→38.8), Gangwon (75.0→36.3), and Chungbuk (66.6→36.3) are forecasted to drop to around 35 points, indicating very poor conditions.

The nationwide occupancy rate in August was 76.8%, down 2.8 percentage points from the previous month. By region, the metropolitan area (84.6%) fell by 4.1 percentage points, the six major cities (71.3%) dropped by 8.3 percentage points, while other regions rose from 76.1% to 78.0%, an increase of 1.9 percentage points.

Source=Korea Research Institute for Human Settlements

The reasons for non-occupancy were delays in selling existing homes (44.7%), failure to secure tenants (27.7%), and failure to secure balance loans (21.3%), in that order. KHIA stated, "Due to economic downturn and rising interest rates, occupancy rates are expected to decline further," and recommended, "Measures such as revitalizing housing transactions and strengthening loan support for the homeless are necessary to prevent a decline in occupancy rates."

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