June Nationwide Housing Market Outlook Cloudy..."Impact of Rising Raw Material Costs and Interest Rate Hikes"

June Nationwide Apartment Pre-Sale Outlook Index 70.9
Index Declines in All Regions Except Jeju
Sejong 100→56.2, Daejeon 100→76.4

[Asia Economy Reporter Hwang Seoyul] The nationwide housing market sales outlook for June is expected to contract across the country as the burdens on suppliers and buyers are reflected due to soaring raw material prices and rising interest rates.

The Korea Housing Industry Research Institute (hereafter KHIRI) announced on the 21st that the nationwide apartment sales outlook index for June recorded 70.9, down 17 points from last month’s 87.9. This index is a measure compiled by surveying housing developers on their sales market outlook. A figure below the baseline (100) indicates a negative market outlook.

Except for Jeju, all regions showed a declining trend in the index. The Seoul metropolitan area is expected to drop 21.9 points from last month’s 102.9 to 81.0, and provincial metropolitan cities are forecasted to fall 22.4 points from 88.9 to 66.5. Provinces excluding metropolitan cities are expected to decrease by 11.1 points from 81.6 to 70.5.

In particular, Sejong is projected to fall about 44 points from 100 last month to 56.2 this month, and Daejeon also recorded a 23.6-point drop to 76.4, indicating a significant deterioration in the sales outlook for major provincial cities.

KHIRI analyzed, “It appears that concerns about an overall economic downturn, the burden on suppliers due to soaring raw material prices, and buyers’ worries about housing price declines caused by rising interest rates are reflected in the outlook.”

Despite the overall downward trend, Seoul, Gwangju, and Jeju showed outlooks above the 80-point level, suggesting that expectations for the sales market are maintained at a certain level. Seoul (93.0) and Gwangju (85.0) slightly decreased from the previous month but still remained in the 90s and 80s respectively. Jeju was the only region to record an increase, rising 3.6 points from 76.4 last month to 80.0. KHIRI noted that regions with relatively low recent apartment sales volumes showed smaller declines or slight increases in their outlooks.

Meanwhile, the nationwide average sales price for June is expected to rise by 12.7% compared to May, while sales volume is forecasted to decrease by 2.1%. Unsold inventory is predicted to increase by 2.5%.

KHIRI pointed out, “If the global raw material supply contraction and macroeconomic deterioration continue to impose burdens, the sales market may worsen. Careful market monitoring and preparation of countermeasures in response to changes in the business environment are necessary.”

This content was produced with the assistance of AI translation services.