Negative Sales Market Despite Deregulation of Restricted Areas... "Impact of Weakened Buyer Sentiment"

July Nationwide Apartment Sales Outlook Index 70.4
Declines for Two Consecutive Months Since May's 87.9

July Apartment Sales Outlook Index / Photo by Housing Industry Research Institute

[Asia Economy Reporter Hwang Seoyul] Although policies to ease housing market regulations, such as lifting restrictions on regulated areas, have been announced, the apartment sales outlook index has been declining for two consecutive months. Concerns about an economic recession and the contraction of buying sentiment due to interest rate hikes appear to have had a significant impact.

According to the Korea Housing Industry Research Institute (hereinafter KHIRI) on the 14th, the nationwide apartment sales outlook index for July is expected to fall by 0.5 points from the previous month to 70.4. The index has declined for two consecutive months since May (87.9). KHIRI analyzed, "Although we expected a turnaround in the sales market atmosphere due to the lifting of speculative overheating zones in Daejeon and Daegu, the rise in base interest rates and concerns about an economic recession seem to have greatly dampened buying sentiment."

The apartment sales outlook index is an indicator that supports the management of the sales market through situational assessment and risk diagnosis of the sales market, and the survey is conducted among members of the Korea Housing Association and the Korea Housing Builders Association.

Specifically, the metropolitan area is expected to record 75.7, down 5.3 points from last month (81.0). Seoul is expected to fall 7.6 points from last month (93.0) to 85.4, and Gyeonggi is expected to drop 11 points to 66.7.

Provincial metropolitan cities are expected to slightly rise to 68.6 compared to the previous month (66.5), while provincial areas are expected to record 69.7, down 0.8 points from the previous month (70.5).

Daegu (60.0) and Sejong (66.7) are expected to improve by 17.2 points and 10.5 points respectively compared to the previous month, but since the index remains above 60, negative outlooks are likely to persist. KHIRI analyzed this increase as "a base effect due to the sharp decline in last month's outlook." In June, the indices for Daegu and Sejong were 42.8 and 56.2 respectively, which is about half compared to May. In May, Daegu recorded 80.0 and Sejong 100.0.

Jeju, which was the only region to show an upward outlook last month, is expected to fall about 13 points from the previous month (80.0) to 66.7 points.

Meanwhile, the nationwide average sales price index for July is expected to drop 12.0 points from the previous month to 111.7, and the sales volume index is expected to decrease by 2.5 points to 92.2. The unsold inventory index is predicted to increase by 10.1 points to 115.4.

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