"Unable to Handle Interest and Housing Price Drops"... Incheon Has the Most Apartments Resold Within One Year

Disposition Rate Within One Year 14.24%
Rapid Disposition Due to Interest Rate Hikes and House Price Decline

[Asia Economy Reporter Kim Hyemin] The region with the highest rate of apartment sales within less than a year of purchase last year was Incheon, according to a recent investigation. Analysts suggest that the rapid rise in interest rates and the onset of a housing price decline led many buyers to sell their homes hastily.

According to data analyzed from the Court Registry Information Plaza on the 10th, 50,322 people sold collective housing units (apartments, multi-family houses, row houses, officetels) in Incheon last year, of whom 7,167 resold within one year of purchase. This accounts for 14.24%, the highest proportion among the 17 metropolitan local governments.

During the same period, out of 1,029,234 people nationwide who sold apartments, 96,769 (9.4%) held their properties for one year or less. In the Seoul metropolitan area, 36,2423 sellers included 36,974 who resold within a year, making up 10.2%. Incheon’s figure significantly exceeded both the national and metropolitan averages. Following Incheon, Sejong recorded 12.1% (804 out of 6,637), and Chungnam 11.5%. Seoul and Gyeonggi were at 9.4% and 9.6%, respectively.

This trend is attributed to the sharp rise in interest rates last year, which increased loan interest burdens, coupled with a steep drop in housing prices, prompting highly leveraged buyers (those who borrowed extensively, known as "young-kkul-jok") to rush to sell. According to KB Real Estate, apartment prices in Incheon fell by 6.54% last year, while Sejong saw an 11.46% decline. An industry insider noted, "Incheon experienced a rapid price surge in 2021, leading to a considerable number of 'gap investments' made for investment rather than actual residence. Buyers who purchased homes with loans and jeonse deposits during the low-interest period faced significant pressure to sell due to the sudden rise in interest rates and falling jeonse prices."

The annual supply of over 40,000 housing units (move-ins) likely added to the burden. Incheon completed move-ins for approximately 43,000 units in 2021 and 42,000 units last year, with about 45,000 units expected this year as well. The overwhelming supply in Incheon alone has led to forecasts that the housing price decline could deepen this year. Yoo Kyung-hee, Senior Researcher at Real Estate R114, stated, "Incheon’s sales market is sluggish, and concerns are high that the historic supply volume will accelerate the downward trend. This year, sales movements may continue, especially among highly leveraged buyers struggling with rising loan interest and gap investors unable to return jeonse deposits to tenants."

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