Apartment complexes in Banpo, as seen from Ichon-dong, Yongsan-gu, Seoul. [Herald DB]
Apartment complexes in Banpo, as seen from Ichon-dong, Yongsan-gu, Seoul. [Herald DB]

Improved market sentiment driven by rising home prices and a buoyant stock market in the first half of the year pushed the national apartment move-in outlook index higher for the third consecutive month in July.

Thursday, the Korea Housing Industry Research Institute said a survey of housing developers showed the national apartment move-in outlook index for this month climbed 12.9 points from the previous month to 97.5.

The move-in outlook index gauges whether buyers who purchased apartments on a pre-sale basis will be able to complete their final payments and move in as scheduled. A reading above 100 indicates that positive expectations for move-in conditions outweigh negative ones; a reading below 100 signals the opposite.

By region, the Greater Seoul metropolitan area rose 20.9 points (81.7 to 102.6), major metropolitan cities gained 18.9 points (84.4 to 103.3) and provincial areas climbed 5.5 points (85.8 to 91.3).

The national index had fallen as low as 69.3 in April amid tightened lending and external uncertainty stemming from the war in the Middle East, before staging a sharp three-month rebound through May (74.1), June (84.6) and July (97.5). A researcher at the institute said the recovery reflected a combination of factors: improved market sentiment on the back of rising home prices, better liquidity conditions driven by a strong stock market, and expectations of reduced future housing supply.

Within the metropolitan area, Seoul rose 16.0 points (102.7 to 118.7), Incheon gained 18.9 points (70.3 to 89.2) and Gyeonggi Province jumped 27.8 points (72.2 to 100.0). The institute said the continued rise in metropolitan home prices — particularly the strength concentrated around the semiconductor belt including Dongtan — appeared to be lifting market sentiment.

Among major cities, Daegu posted the largest gain, rising 29.3 points (81.8 to 111.1), followed by Daejeon up 23.9 points (82.3 to 106.2), Busan up 21.9 points (72.2 to 94.1), Gwangju up 15.6 points (77.7 to 93.3), Ulsan up 15.3 points (92.3 to 107.6) and Sejong up 7.6 points (100.0 to 107.6). Daegu, Ulsan, Sejong and Daejeon all exceeded the 100-point threshold, indicating that positive expectations for move-in conditions are now dominant. The institute said the results reflected expectations that the burden of vacant units would ease as unsold inventory after completion declines and the volume of scheduled move-ins shrinks.

In provincial areas, South Chungcheong Province rose 25.0 points (75.0 to 100.0), South Jeolla Province gained 22.2 points (66.6 to 88.8), Gangwon Province climbed 13.4 points (66.6 to 80.0) and Jeju rose 8.6 points (71.4 to 80.0). By contrast, North Jeolla Province fell 10.0 points (100.0 to 90.0), North Gyeongsang Province dropped 8.4 points (100.0 to 91.6) and South Gyeongsang Province declined 7.1 points (107.1 to 100.0). The institute said that while the overall outlook for provincial areas improved as move-in volumes fell sharply, recovery expectations remain limited in some regions due to persistent unsold inventory and sluggish local economies.

The institute added that although banks are tightening mortgage lending standards in response to rising household debt, investment sentiment across the housing market could continue to improve for now, supported by liquidity in the stock market.

The national apartment occupancy rate for June came in at 69.9 percent, down 1.3 percentage points from the previous month. The rate fell in the Greater Seoul area, from 84.8 percent to 83.0 percent, and in the five major metropolitan cities and Sejong, from 70.1 percent to 62.9 percent, while other regions saw an increase from 66.9 percent to 70.2 percent. The leading reasons for units remaining vacant were delays in selling existing homes (36.7 percent), failure to secure final-payment loans (26.5 percent), failure to secure tenants (20.4 percent) and delays in selling pre-sale rights (2.0 percent).

Meanwhile, according to real estate data provider Budongsan R114, the number of apartments scheduled for move-in this month stands at 15,646 units — the lowest for any July in a decade.


hope@heraldcorp.com