Despite Deregulation, Last Month's Apartment Occupancy Rate in the Seoul Metropolitan Area Hits 6-Year Low

Despite the government's relaxation of real estate regulations, the housing market has not fully recovered, with apartment occupancy rates remaining at the 60% level. In particular, the Seoul metropolitan area recorded its lowest occupancy rate since April 2017.

[Image source=Yonhap News]

The Korea Housing Industry Research Institute announced on the 13th that the nationwide apartment occupancy rate last month was 64.6%, up 1.3 percentage points from February.

By region, the Seoul metropolitan area fell by 3.5 percentage points from 77.1% to 73.6%, the five major metropolitan cities rose by 0.4 percentage points from 60.6% to 61.0%, and other regions increased by 3.8 percentage points from 60.1% to 63.9%.

Within the Seoul metropolitan area, Seoul (79.7→76.2) and Incheon·Gyeonggi area (75.8→72.3) saw declines in occupancy rates. Among non-metropolitan areas, except for Daegu·Busan·Gyeongsang area (62.7→60.1) which declined, Gangwon area (52.0→60.0), Daejeon·Chungcheong area (59.7→64.0), and Gwangju·Jeolla area (59.3→64.2) all experienced increases in occupancy rates.

Notably, the Seoul metropolitan area's occupancy rate has shown a gradual downward trend since December 2021 (92.4%). Although the occupancy rate slightly recovered in February due to the government's real estate regulation easing measures, it declined again to record the lowest level (73.6%) since April 2017.

The reasons for non-occupancy were delayed sales of existing homes at 45.5%, failure to secure tenants at 29.1%, failure to secure balance loans at 12.7%, and others at 10.9%. Most figures showed little change from the previous month, but failure to secure tenants decreased by 4.2 percentage points (33.3%→29.1%).

The Korea Housing Industry Research Institute explained, "The decrease in failure to secure tenants among the reasons for non-occupancy appears to be due to increased liquidity of small-scale rental businesses following the complete abolition of regulations on Jeonse eviction loans implemented from March 2, as well as the reduction of jeonse and monthly rent loan interest rates by commercial banks (especially internet banks) and the launch of new jeonse and monthly rent loan products, making it easier to secure tenants by facilitating the procurement of jeonse funds."

[Image courtesy of Housing Industry Research Institute]

Meanwhile, the apartment occupancy outlook for this month compared to last month showed an improvement nationwide, rising 4.5 points to 84.7. This index is surveyed among housing business operators, with values above 100 indicating a positive sales outlook and below 100 indicating a negative outlook.

The occupancy outlook is expected to rise by 8.1 points to 79.1 in the Seoul metropolitan area and by 13.9 points to 89.3 in the metropolitan cities, but is projected to decline by 4.0 points to 83.3 in provincial areas.

Except for the 4.0-point decline in provincial areas, the April occupancy outlook index rose in all regions. This reflects the easing of resale restriction periods due to the passage of the Housing Act Enforcement Decree, relaxation of real estate regulations, and easier financing through loan products such as the special Bogeumjari Loan and relaxed loan regulations for first-time homebuyers.

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