Dark Clouds Over the Housing Market... Worsening for Three Consecutive Months

Jusanyeon, 'July Housing Business Sentiment Index'
National Sentiment Index 60.4... 3.7p↓ Compared to June

June Housing Business Sentiment Index Trends / Data provided by Housing Industry Research Institute

[Asia Economy Reporter Hwang Seoyul] The housing business market is expected to deteriorate for the third consecutive month. Although the decline in the related index has narrowed, the recent negative conditions in the financial and real estate markets suggest that it will take a long time for the market to return to its previous state.

According to the "July Housing Business Market Outlook Index" released by the Housing Industry Research Institute (hereinafter referred to as HIRI) on the 19th, the nationwide outlook index for this month was 60.4, down 3.7 points from June's 64.1, marking a decline for three consecutive months. The index recorded 101.2 in April and 82.6 in May.

The Housing Business Market Outlook Index is calculated monthly by surveying housing business operators on their business performance and outlook. It is a supply market indicator that comprehensively assesses the housing business market from the supplier's perspective. The survey targets members of the Korea Housing Association and the Korea Housing Construction Association. The index baseline is 100, with below 85 indicating a downturn phase, 85 to less than 115 indicating a stable phase, and 115 or above indicating an upturn phase.

Specifically, the housing business market outlook index for the Seoul Metropolitan Area fell from 81.6 last month to 71.5 this month, indicating a continued downward trend in the housing business market. In particular, Seoul (72.0) and Gyeonggi (64.5) saw significant drops of 12.6 points and 21.5 points, respectively.

Outside the metropolitan area, the index (72.3) is expected to decline by 2.3 points. However, Sejong and Chungnam, which experienced large declines last month, showed slight recoveries with increases of 8.6 points and 7.8 points, respectively.

HIRI stated, "Although the rate of decline in the index has slowed, the index compared to the same month last year has worsened across all nationwide and regional units. Considering the recent financial and real estate market conditions, it seems that a considerable amount of time is needed for the housing business market to normalize."

The nationwide material supply index (53.9) and financing index (59.2) for July fell by 4.5 points and 14.8 points, respectively, compared to the previous month. HIRI analyzed that "due to the nature of housing construction projects, instability in raw material supply is reflected in financing retrospectively."

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