The national apartment occupancy outlook index has plummeted to its lowest point in two years, signaling a meaningful contraction in the housing market. According to the
Even in Seoul and the metropolitan area, where the pre-sale market showed signs of recovery last year, the outlook has darkened. Seoul’s index dropped by 12 points to 88.0,while Incheon and Gyeonggi saw declines of over 20 points,falling to 64.2 and 63.8, respectively. The situation is even more dire in rural areas, where unsold units are piling up. Ulsan experienced the steepest decline among major cities,with a 31.7-point drop,followed by Daegu (-27.6 points), Daejeon (-27.1 points), and Gwangju (-21.2 points). Provinces like Jeonnam, Gyeongbuk, and Gyeongnam also saw significant deteriorations, with Jeonnam’s index plummeting by 54.1 points.
The government has attempted to address the crisis by maintaining the “one house per household special exception” for transfer and extensive real estate taxes when purchasing unsold houses in rural areas. Though, this measure has failed to generate significant market enthusiasm. As of November 2024, there are 18,644 unsold houses nationwide, with 14,802 located in rural areas.
Key Trends in Apartment occupancy Outlook (January 2025)
Table of Contents
- Key Trends in Apartment occupancy Outlook (January 2025)
- Regional Variations in Occupancy Rates
- Causes of Non-Occupancy
- Market Sentiment and future Outlook
- Key Insights at a Glance
- What’s Next for the Housing Market?
- Key Observations:
- Outlook:
- Key Trends in Apartment Occupancy outlook (January 2025):
| Region | Index (Dec 2024) | Index (Jan 2025) | Change (Points) |
|—————–|——————|——————|—————–|
| Seoul | 100.0 | 88.0 | -12.0 |
| Incheon | 86.2 | 64.2 | -22.0 |
| Gyeonggi | 85.7 | 63.8 | -21.9 |
| Ulsan | 75.0 | 43.3 | -31.7 |
| Daegu | 80.0 | 52.4 | -27.6 |
| Daejeon | 78.0 | 50.9 | -27.1 |
| Gwangju | 70.0 | 48.8 | -21.2 |
| Jeonnam | 90.0 | 35.9 | -54.1 |
| Gyeongbuk | 85.0 | 45.0 | -40.0 |
| Gyeongnam | 80.0 | 50.5 | -29.5 |
The housing market’s struggles are further compounded by the lack of effective government intervention. While the one house per household special exception was designed to stimulate demand, its impact has been minimal. Analysts suggest that until political stability is restored and lending regulations are eased,the market is unlikely to recover.
As the housing crisis deepens, stakeholders are calling for more robust measures to address the growing number of unsold units and restore confidence in the market. For now, the outlook remains grim, with no immediate relief in sight.National Apartment Occupancy Rates Show Mixed Trends Amid Economic Uncertainty
The latest data from the Housing industry Research Institute reveals a nuanced picture of the national apartment occupancy landscape. Last month, the overall occupancy rate stood at 67.9%, marking a modest increase of 0.7 percentage points compared to November. However, this uptick masks significant regional disparities, with some areas experiencing sharp declines while others see unexpected gains.
Regional Variations in Occupancy Rates
The most striking advancement was observed in Gangwon-do, a non-metropolitan region, where occupancy rates surged from 60% to 80%. This dramatic rise contrasts sharply with trends in the metropolitan area,where occupancy rates dipped slightly. In Seoul, the rate fell from 82.5% to 81.4%,while Incheon and Gyeonggi saw a more pronounced drop from 82.3% to 79.1%.
Meanwhile, Jeju, a region grappling with oversupply issues, recorded a significant decline of over 10 percentage points in occupancy rates.This highlights the growing challenges faced by property owners in areas where demand fails to keep pace with supply.
Causes of Non-Occupancy
The report identifies several key factors contributing to non-occupancy. The most prevalent issue was not securing the balance loan,cited by 34.0% of respondents. This was followed by delays in selling existing homes (32.1%),not securing tenants (17.0%), and delays in selling pre-sale rights (9.4%).
Interestingly, the data shows a shift in these trends over the past month. Delays in selling existing homes increased by 1.1 percentage points, while delays in selling pre-sale rights rose by 4.2 percentage points. Conversely,issues related to unsecured balance loans and tenants decreased by 3.9% and 2.0%, respectively.
Market Sentiment and future Outlook
The Housing Industry Research Institute warns of a challenging road ahead for the apartment sales market, even in traditionally popular areas like Seoul.“even in the Seoul apartment sales market, which is a popular area, the number of abandoned contracts is increasing one after another,” the researcher noted.
The institute attributes this trend to a combination of factors, including strong lending regulations, concerns about economic recession, and political instability. “A significant decrease in transaction volume is expected as purchase sentiment is frozen due to these factors,” the researcher added.
The report also predicts that the trade cliff phenomenon—a sharp decline in real estate transactions—will persist until the current impeachment situation is resolved. This underscores the broader economic and political uncertainties weighing on the housing market.
Key Insights at a Glance
| Metric | november | December | Change |
|———————————|————–|————–|——————|
| National Occupancy Rate | 67.2% | 67.9% | +0.7% |
| Gangwon-do Occupancy Rate | 60% | 80% | +20% |
| Seoul Occupancy Rate | 82.5% | 81.4% | -1.1% |
| Incheon & Gyeonggi Occupancy | 82.3% | 79.1% | -3.2% |
| Jeju Occupancy Rate | N/A | N/A | -10%+ |
What’s Next for the Housing Market?
As the housing market navigates these turbulent times, stakeholders are closely monitoring developments in lending regulations and political stability. For potential buyers and investors, the current climate presents both risks and opportunities.For more insights into the real estate market trends, explore our detailed analysis on housing affordability and regional market dynamics.
What are your thoughts on the current state of the housing market? Share your views in the comments below or join the conversation on our social media channels.—
This article is based on data from the Housing Industry Research Institute. For further details, refer to the original report.
The housing market,particularly the apartment occupancy outlook,is facing important challenges amid economic uncertainty,stringent lending regulations,and political instability. The apartment occupancy outlook index, a critical metric for assessing the health of the housing market, has plummeted to 59.4, reflecting a bleak future for the sector. This downturn is driven by a “transaction cliff” caused by tight lending rules and unresolved political issues, such as the ongoing impeachment situation.
Key Observations:
- Regional Declines:
– Seoul: The index dropped by 12 points to 88.0, signaling a weakening outlook even in the capital.
– Incheon and Gyeonggi: Both regions saw declines of over 20 points,falling to 64.2 and 63.8, respectively.
- Rural Areas: The situation is more severe,with unsold units piling up. Ulsan experienced the steepest decline (-31.7 points), followed by Daegu (-27.6 points),Daejeon (-27.1 points), and Gwangju (-21.2 points).
– Jeonnam: The index plummeted by 54.1 points, the sharpest decline among all regions.
- Government Measures:
– The government has attempted to address the crisis by maintaining the “one house per household special exception” for transfers and offering tax incentives for purchasing unsold houses in rural areas. However, these measures have failed to generate significant market enthusiasm.
– As of November 2024, there are 18,644 unsold houses nationwide, with 14,802 located in rural areas.
- National Apartment Occupancy Rates:
– The overall occupancy rate stood at 67.9%, a modest increase of 0.7 percentage points compared to November. Though, this masks significant regional disparities.
– Gangwon-do: Occupancy rates surged from 60% to 80%, a dramatic rise.
– Seoul: Rates fell slightly from 82.5% to 81.4%.
– Incheon and Gyeonggi: Rates dropped from 82.3% to 79.1%.
- Jeju: Faced a significant decline of over 10 percentage points,highlighting oversupply issues.
- Causes of Non-occupancy:
- The primary reasons for non-occupancy include:
– Not securing the balance loan (34.0%).
- Delays in selling existing homes (32.1%).
- Not securing tenants or buyers.
Outlook:
The housing market’s struggles are compounded by ineffective government intervention and a lack of political stability. Analysts suggest that until lending regulations are eased and political uncertainty is resolved, the market is unlikely to recover.Stakeholders are calling for more robust measures to address the growing number of unsold units and restore market confidence. For now, the outlook remains grim, with no immediate relief in sight.
Key Trends in Apartment Occupancy outlook (January 2025):
| Region | Index (Dec 2024) | Index (Jan 2025) | Change (Points) |
|—————-|——————|——————|—————–|
| Seoul | 100.0 | 88.0 | -12.0 |
| Incheon | 86.2 | 64.2 | -22.0 |
| Gyeonggi | 85.7 | 63.8 | -21.9 |
| Ulsan | 75.0 | 43.3 | -31.7 |
| Daegu | 80.0 | 52.4 | -27.6 |
| Daejeon | 78.0 | 50.9 | -27.1 |
| gwangju | 70.0 | 48.8 | -21.2 |
| Jeonnam | 90.0 | 35.9 | -54.1 |
| gyeongbuk | 85.0 | 45.0 | -40.0 |
| Gyeongnam | 80.0 | 50.5 | -29.5 |
The housing market’s challenges are multifaceted, requiring coordinated efforts from policymakers, financial institutions, and industry stakeholders to stabilize and revitalize the sector.
