Analysis of Factors Influencing the Credit Risk in Residential Development Project Financing (PF)

This study analyzes key factors influencing default risk in real estate project financing (PF) to provide insights for improving PF lending soundness and risk management. Amid a challenging market with rising PF delinquency and defaults, this research focuses on how internal structural factors and project attributes impact credit risks. Analyzing 76 PF projects in Korea from 2014 to 2019, the study uses binary logistic regression with variables categorized as project characteristics, profitability and funding structure, and external factors. Default was identified through presale rates, repayment delays, or maturity extensions. Results show funding ratio, exit presale ratio, and construction cost raise default risk, while profitability, Seoul location, and top 20 contractor status lower it. These findings stress the importance of internal efficiency, financial viability, and structural competitiveness over funding scale or presale levels. The study underscores refining PF credit assessments by focusing on structural soundness, profitability, and contractor reliability to strengthen PF screening and risk management systems.