The June apartment move-in outlook index for Seoul turned positive for the first time in three months.
The Korea Housing Institute said on the 11th that it reached this result after conducting a survey of companies engaged in dwellings business.
In June this year, the nationwide apartment move-in outlook index came in at 84.6, a sharp rise of 10.5 points from a month earlier. By region, the greater Seoul area was 81.7, up 3.3 points; the metropolitan cities were 84.4, up 5.1 points. Provincial areas surged 17.2 points to 85.8, showing even improvement across all regions.
With the nationwide rise, the recovery continued to a level above the 12-month average of 83.9. This is seen as reflecting expectations that, as more neighborhoods have recently seen home prices climb and Korea's stock market boom and overall economic revitalization continue, those nearing move-in will worry less about securing funds.
In the greater Seoul area, trends diverged by locality. Seoul rose 8.8 points from 93.9 to 102.7, and Incheon also climbed 2.3 points to 70.3. In contrast, Gyeonggi Province edged down 1.3 points to 72.2. Notably, Seoul topped the baseline of 100 for the first time in three months since March, signaling a positive turn. With listings shrinking in the market and surplus funds emerging from a strong stock market, some expect a spillover benefit as people shift their attention to moving into newly built apartments.
Among the metropolitan cities, Daejeon rose 13.1 points to 82.3, while neighboring Sejong (up 16.7 points, 100.0) showed a similarly steep increase. Most other major regional cities also traced an upward curve, including Daegu (81.8), Busan (72.2) and Ulsan (92.3).
The Korea Housing Institute interpreted that in Daejeon and Sejong, where monthly move-in supply of new apartments hovered around 400 units on average over the last year, expectations for improved move-in conditions grew as jeonse prices kept rising.
Gwangju, by contrast, slipped 8.0 points from 85.7 to 77.7. In April, about 3,000 units came on line at once, burdening absorption, and the concurrent decline in home prices dimmed the outlook.
In the provinces, South Gyeongsang (107.1), North Chungcheong (100.0), North Gyeongsang (100.0) and North Jeolla (100.0) all met or exceeded the baseline of 100. The remaining areas, including South Chungcheong, Gangwon, South Jeolla and Jeju, also gained, improving the overall mood. This appears to reflect the stock market boom improving funding conditions while new presale supply in provincial areas had decreased.
However, with U.S.-driven inflation and tightening fiscal moves by major countries, Korea's lending rate is also under upward pressure. The Korea Housing Institute explained that, as interest burdens grow, this could hinder end buyers' ability to secure funds, so it is necessary to watch financial market trends closely.
Meanwhile, the actual move-in rate for apartments nationwide in May was 71.2%, up 15.4 percentage points from April. By region, the greater Seoul area improved 2.6 percentage points to 84.8%; the five major metropolitan cities rose 12.3 percentage points to 70.1%; and other regions climbed 22.6 percentage points to 66.9%, all showing recovery.
In Seoul, the rate dipped a marginal 1.2 percentage points to 91.0% from the previous month but remained solid, while Incheon and Gyeonggi rose 4.5 percentage points to 81.6% as the rise in home prices spread. Outside the greater Seoul area, all zones saw conspicuous gains in move-in rates, including Gangwon, which surged 22.5 percentage points, as well as Daegu–Busan–Gyeongsang, Gwangju–Jeolla, Daejeon–Chungcheong and Jeju.
This was the effect of a sharp rebound in just one month after April's steep drop in move-in rates caused by a glut of large-scale move-ins concentrated in the provinces. As a result, the move-in rate gap between the greater Seoul area and non-capital regions narrowed from 32.1 percentage points to 16.5 percentage points, nearly halving, and the polarization in move-ins between regions eased somewhat.
Among the reasons for non-occupancy after presale, the most common response was failure to secure a balance loan at 35.4%. That was followed by failure to sell an existing home (29.2%), failure to find a jeonse tenant (18.8%) and failure to resell presale rights (4.2%). The share attributable to delayed sale of existing dwellings fell 5.5 percentage points from a month earlier, which is analyzed as the effect of the government's eased rules allowing non-resident single-home owners to dispose of homes even with tenants in place.
A Korea Housing Institute official said, "Although the Bank of Korea continues to hold the base rate at 2.50% annually, it has left room for increases, so the interest burden on mortgage loan borrowers is expected to grow," adding, "With optimism that economic recovery and a booming stock market can spur dwellings demand and caution that loan interest pressure will brake fundraising in tension, we need to watch whether this improvement in move-ins will continue over the long term."