The forecast for apartment occupancy nationwide in January recorded its lowest level in two years. This is attributed to the high interest rates, government loan regulations, and the impeachment political situation.
On the 14th, the Research Institute for Housing Industry announced that the nationwide apartment occupancy forecast index for January was recorded at 68.4. This is a drop of 20.2 points compared to December of last year (88.6), marking the lowest level in two years. An index above the benchmark of 100 indicates that more developers expect occupancy conditions to improve compared to the previous month. A value below 100 signifies the opposite.
Regionally, the index for the metropolitan area (90.6→72.0), large cities (90.2→66.1), and rural areas (86.6→68.6) all fell significantly. Seoul, which had maintained the benchmark of 100 until last month, dropped to 88.0 this month, down 12.0 points. All 17 cities and provinces, including Seoul, fell below the benchmark.
The Research Institute for Housing Industry noted, "Amidst the intense loan regulations, the purchasing sentiment has contracted, and the uncertainties in the market have increased due to concerns about economic recession and the impeachment political situation."
In December of last year, the national occupancy rate was reported at 69.7%, a slight increase of 0.7 percentage points compared to November. The metropolitan area (79.9%) and five major cities (67.8%) each decreased by 2.4 percentage points and 1.8 percentage points, respectively, but rural areas (67.2%) saw an increase of 3.6 percentage points. Seoul also slightly decreased to 81.4%, down from 82.5% the previous month. The Research Institute stated, "In the apartment sales market in popular areas like Seoul, there have been numerous contract cancellations, and the amount of unsold properties has reached the highest level in 11 years, leading to intensified uncertainty and a decrease in occupancy rates."
The primary reason for unoccupied units was the lack of securing the final payment loan at 34.0%. This was followed by delays in selling existing homes (32.1%), failure to secure tenants (17.0%), and delays in selling sale rights (9.4%). The Research Institute predicted, "As uncertainties expand due to strong loan regulations, worries about economic recession, and political instability, purchasing sentiment will freeze, and a decrease in transaction volume is expected," adding that "the transaction cliff phenomenon will continue until the impeachment political situation is resolved."