Index Declines in June Following May
Increased Cost Burden on Demanders
May Occupancy Rate Only Slightly Rises
Top Reason for Non-Occupancy: Tenant Not Secured
"Need to Ease Mortgage Regulations for Non-Homeowners"
[Asia Economy Reporter Hwang Seoyul] The outlook for apartment move-ins has been surveyed to be more negative for two consecutive months compared to the previous month. The top reason for not moving into apartments last month was identified as ‘failure to secure tenants,’ prompting calls for measures such as easing loan regulations for the homeless to prevent a decline in move-in rates.
According to the Korea Housing Industry Research Institute (hereinafter referred to as KHIRI) on the 22nd, the apartment move-in outlook index for June is expected to drop 12.8 points from last month’s 85.4 to 72.6. KHIRI anticipated that concerns over an economic recession due to the prolonged Ukraine war, rising interest rates from the U.S., and inflation would increase the cost burden on housing demanders, affecting purchases. The survey was conducted among members of the Korea Housing Association and the Korea Housing Construction Association.
Specifically, the metropolitan area recorded 78.9, down 20.5 points from last month’s 99.4, and metropolitan cities dropped 17.1 points to 59.0. Regions excluding metropolitan cities recorded 73.0, a decrease of 6.6 points from the previous month.
Amid the overall downward trend, Sejong (72.2), Incheon (70.0), and Gyeonggi (81.8) are expected to worsen by 27.8 points, 26.4 points, and 22.8 points respectively compared to the previous month. KHIRI analyzed, “Although the volume of move-ins in these areas is increasing, the timing of the reflection of substantive deregulation policies since the new government’s inauguration is uncertain.”
The nationwide apartment move-in rate in May (82.4%) increased by 0.1 percentage points from April (82.3%). The reasons for non-move-in were tenant non-securement (35.2%), delay in selling existing homes (31.5%), and failure to secure balance loans (29.6%) in that order. Notably, the response rate for tenant non-securement among the reasons for non-move-in rose by 10.7 percentage points compared to the previous month. KHIRI judged that “measures such as easing loan regulations for the homeless are necessary to prevent a decline in move-in rates.”
Last month, the metropolitan area move-in rate (89.4%) rose by 0.5 percentage points from the previous month (88.9%). Metropolitan cities recorded 82.9%, down 0.9 percentage points from April, while regions excluding metropolitan cities rose by 0.7 percentage points to 79.4%.
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