Seoul Apartment Occupancy Outlook Surges... "Driven by Price Increases and Sharp Supply Decline" [Real Estate AtoZ]

Seoul's Apartment Occupancy Outlook Index Hits 100 in January
Recovers to Benchmark Level for the First Time Since Last October

Apartment in downtown Seoul. Photo by Yonhap News Agency

The apartment occupancy outlook index for the Seoul metropolitan area saw a significant increase this month. Experts explain that this was influenced by the continued rise in apartment prices in Seoul and a sharp decrease in new supply, despite government lending regulations.

The Housing Industry Research Institute (HRI) announced on the 13th that, according to a survey of housing developers, the nationwide apartment occupancy outlook index for January was 85.1, up 9.6 points from the previous month. In the Seoul metropolitan area, the index rose by 20.5 points to 89.4. Seoul recorded a 23.4-point increase to reach 100.0, Incheon rose by 21.7 points to 80.7, and Gyeonggi Province climbed by 16.6 points to 87.5. Since October of last year, Seoul’s occupancy outlook index has recovered to 100.

This index forecasts whether buyers who have purchased apartments will be able to make their final payments and move in as planned. A value above 100 indicates that more respondents are optimistic about the occupancy market, while a value below 100 suggests the opposite.

The HRI stated, "The occupancy outlook, which had dropped sharply due to the strong lending regulations implemented in October last year, has improved as perceptions have shifted. The continued rise in apartment prices and supply shortages have led to the belief that the impact of the regulations is limited." The institute added, "With the number of new apartment completions in Seoul expected to decrease by 31.6% compared to last year, the shortage of new apartments is likely to intensify, which has contributed to the improved outlook across the metropolitan area."

Among major metropolitan cities, Gwangju saw an increase of 22.6 points, Daegu 19.4 points, Busan 10.0 points, and Sejong 9.1 points.

The HRI explained, "Since November of last year, the five major metropolitan cities have seen a rise in transaction volumes, especially in key areas, spreading expectations of a housing market recovery. In addition, the resumption of new mortgage loan reviews by commercial banks at the beginning of the year is expected to ease some difficulties in making final payments and moving in, which has been reflected in the occupancy outlook."

Among provinces, Jeonnam rose by 11.1 points, Chungnam by 10.3 points, Gangwon by 7.5 points, and Gyeongbuk by 6.6 points. Jeonbuk, however, fell by 5.7 points compared to the previous month.

The HRI commented, "The rise in the occupancy outlook for provincial areas appears to be influenced by the implementation of a new policy this year, which offers up to a 50% reduction in acquisition tax for unsold apartments purchased after completion in non-metropolitan regions experiencing population decline, raising expectations for resolving unsold inventory."

The institute continued, "However, in Jeonbuk, while Jeonju has seen a strong market for new apartments due to high subscription competition, surrounding areas such as Gunsan and Iksan are experiencing polarization, with measures like discounted sales being implemented to address unsold units. As the population in the province declines, demand is concentrated in Jeonju, the regional center, whereas last year, 80% of Jeonbuk’s new apartment supply was concentrated in Iksan and Gunsan, and only 3% in Jeonju, resulting in an imbalance between supply and demand."

Meanwhile, the nationwide apartment occupancy rate in December 2025 was 61.2%, down 4.7 percentage points from the previous month. In the metropolitan area, the rate increased by 2.2 percentage points, while the five major metropolitan cities fell by 2.4 percentage points, and other regions dropped by 9.6 percentage points. Within the metropolitan area, Seoul’s occupancy rate rose by 3.0 percentage points, and Incheon and Gyeonggi by 1.8 percentage points.

The main reasons for non-occupancy were: failure to secure final payment loans (28.6%), delays in selling existing homes (24.5%), failure to secure tenants (18.4%), and delays in selling pre-sale rights (8.2%). Compared to the previous month, delays in selling existing homes dropped by 5.9 percentage points, and failure to secure tenants decreased by 3.4 percentage points, reflecting a recovery in housing market transactions and a reduction in the supply of rental properties.

The HRI stated, "The nationwide decline in occupancy rates appears to be due to commercial banks suspending new mortgage loan applications at the end of the year. However, in the metropolitan area, the impact of deteriorating financial conditions at year-end was limited, as the market had already shifted toward cash-ready buyers due to the 10·15 measures restricting loan accessibility. Additionally, the continued preference for new apartments amid supply shortages led to a rise in occupancy rates for newly sold apartments."