"Unable to Afford Loan Interest"... Incheon Records Highest Ever Rate of Apartments Sold Within One Year of Purchase

Apartment complex in Seoul area (Photo by Asia Economy DB)

[Asia Economy Reporter Ryu Taemin] This year, the proportion of apartment owners in Incheon who sell their properties shortly after purchase has surged. This appears to be due to growing concerns over falling housing prices amid consecutive interest rate hikes increasing loan interest burdens and a flood of supply.

According to the Court Registry Information Plaza on the 20th, among 41,685 sellers who disposed of apartments in Incheon from January to September this year, 6,103 (14.6%) sold their apartments within less than one year of ownership. This is the highest rate since statistics began in 2010 and also the highest nationwide.

During the same period, among 834,876 apartment sellers nationwide, 79,932 sold apartments held for less than one year, accounting for 9.5%. The short-term seller ratio was 9.7% in Seoul with 6,451 out of 66,608 sellers, and 9.5% in Gyeonggi Province with 18,432 out of 193,062 sellers. Incheon’s rate is about 1.5 times higher than the national average.

This seems to be due to the recent downturn in the housing market, with apartment prices in Incheon rapidly declining. According to the Korea Real Estate Board, apartment prices in Incheon surged by 20.38% last year when housing prices were rising, nearly twice the national average of 12.46%. This figure is also higher compared to other metropolitan areas such as Seoul (6.38%) and Gyeonggi (18.90%) during the same period.

However, with the housing market stagnating this year, prices have continued to fall by 3.65%. Additionally, consecutive interest rate hikes have increased loan interest burdens, prompting owners to sell their apartments. This decline rate surpasses those of Seoul (-1.94%) and Gyeonggi (-2.98%). Notably, Incheon apartment prices dropped by 0.38% in the second week of October alone, indicating an accelerating downward trend.

Furthermore, with more than 40,000 housing units supplied annually, the price decline is expected to accelerate. Incheon saw 43,808 units supplied last year, and 45,978 units were supplied this year. Additionally, 44,074 units are scheduled for occupancy next year, and 22,810 units in 2024.

Yeokyunghee, Senior Researcher at Real Estate R114, explained, “Incheon apartments are experiencing a sluggish sales market and increasing additional supply, raising concerns that the downward trend will accelerate. Especially, ‘Youngkkeunjok’ (those who borrow heavily to invest) with high loan ratios are likely making quick decisions to sell as interest burdens rise due to rate hikes while asset values decline.”

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