As expectations and sentiment for a recovery in the dwellings market revived, the July apartment move-in outlook index jumped sharply nationwide. But the actual move-in rate fell, indicating a gap between market expectations and real move-in conditions.
Korea Housing Institute (Jusanyeon) said on the 9th that, based on a survey of housing project operators, the nationwide apartment move-in outlook index for July this year rose 12.9 points from the previous month to 97.5.
By region, the greater Seoul area rose 20.9 points to 102.6, metropolitan cities climbed 18.9 points to 103.3, and provincial areas jumped 5.5 points to 91.3.
Due to external risk factors such as loan regulations and wars, the nationwide index had fallen to 69.3 in April, but it has drawn a steep upward curve for three straight months through May, June, and this month.
Jusanyeon said, "This is the combined effect of improved market sentiment from rising dwelling prices, better funding conditions from a buoyant stock market, and expectations of reduced supply ahead."
In the greater Seoul area, Seoul rose 16.0 points to 118.7, while Incheon and Gyeonggi came in at 89.2 and 100.0, respectively. As home prices have climbed sharply around the capital region since April, Gyeonggi has been singled out for strong sales prices in semiconductor hub cities, including Dongtan, which has significantly lifted market expectations.
Metropolitan cities also saw indices jump across the board in Daegu, Daejeon, Busan, Gwangju, Ulsan, and Sejong. Among them, Daegu, Ulsan, Sejong, and Daejeon topped the baseline of 100, indicating a more positive perception.
In particular, Daegu, which showed the most pronounced rise, saw unsold inventory after completion drop more than 20% as of May, and approvals paused on concerns about oversupply, suggesting there will be little new supply for the time being. That fed sentiment that the burden from remaining inventory will ease.
Among provincial areas, South Chungcheong, South Jeolla, Gangwon, and Jeju rose, while North Jeolla, North Gyeongsang, and South Gyeongsang slowed somewhat. Still, all these regions exceeded the recent one-year average of 80.0. In the provinces, supply has fallen sharply, so overall conditions appear to have improved, but in some areas where the index fell, unsold dwellings still piled up and local economies remained sluggish, limiting the spread of warmth across the board.
Jusanyeon said, "As household loans grow rapidly, commercial banks are tightening criteria for mortgage loan issuance, but based on ample liquidity from an active stock market, investment sentiment across the dwellings market may improve for the time being," adding, "Accordingly, areas in the greater Seoul region centered on the semiconductor industry may continue a favorable trend backed by end-user and investment demand, while in the provinces, considering the burden of unsold homes and local economic conditions, the pace of recovery may be slower, requiring continued monitoring."
Meanwhile, the actual nationwide apartment move-in rate for June was 69.9%, down about 1.3 percentage points from the previous month. The greater Seoul area and metropolitan cities dipped slightly, while provincial areas rose a bit. Seoul fell somewhat to 86.4% from the previous reading, and Incheon and Gyeonggi were similar to the prior month.
Among non-capital regions, Jeju and Gangwon saw higher move-in rates, while the Gyeongsang, Chungcheong, and Jeolla regions declined. This appears to reflect that, in June, new supply in provincial areas decreased, while move-ins concentrated in major cities such as Busan, Ulsan, and Daejeon, slightly delaying actual move-in performance.
The main reason allottees could not move in on time was that they had not sold their existing homes, at 36.7%. That was followed by inability to secure a final payment loan (26.5%) and failure to find a jeonse or monthly rental tenant (20.4%). In areas outside the greater Seoul region, sluggish transactions of existing dwellings became a direct hurdle.
Jusanyeon said, "While the recent move-in outlook index continues to rise on improved market sentiment, the actual move-in rate is moving sideways," adding, "Despite growing expectations for the future market, conditions for actual move-ins—such as selling existing homes or obtaining final payment loans—do not appear to have improved sufficiently. It is necessary to keep checking whether the recovery in market sentiment will lead to active transactions and improved move-in conditions."