December Housing Business Sentiment Slightly Improves... Reflecting Deregulation of Restricted Areas and Policy Optimism

Jusan-yeon, December Housing Business Sentiment Index Forecast

Source: Korea Housing Institute

[Asia Economy Reporter Hwang Seoyul] Expectations for the lifting of regulated area restrictions and the revitalization of housing supply projects have been reflected, leading to a more positive outlook for the housing business market compared to last month. However, the material supply index, which had been recovering since July, declined again this month due to the impact of the Cargo Solidarity strike.

According to the 'December Housing Business Outlook Index' released by the Korea Housing Industry Research Institute (hereafter KHIRI) on the 15th, the nationwide outlook index this month rose by 4.4 points from the previous month to 44.9.

The Housing Business 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 values below 85 indicating a downturn phase, between 85 and 115 indicating a stable phase, and above 115 indicating an upturn phase.

The metropolitan area (46.7) increased by 9.7 points, and the provinces (62.0) rose by 23.6 points, with the housing business outlook index rising in all regions compared to the previous month. In particular, Sejong (58.8) showed the largest increase nationwide, rising by 35.3 points. KHIRI analyzed that "although the housing market recession continues, the impact of the Ministry of Land, Infrastructure and Transport lifting restrictions on four areas adjacent to Seoul (Gwacheon, Seongnam, Hanam, Gwangmyeong) last month, excluding Seoul and its adjacent areas, and the government's maintenance of a private-led housing supply policy have been reflected in expectations for the revitalization of housing supply projects."

The December financing index also rose by 7.6 points to 44.9. However, KHIRI stated, "This is a rebound from the excessive decline so far," adding, "Since issues faced by housing construction businesses such as short-term financial instability, rising construction costs, and the real estate market recession have not yet been resolved, continuous monitoring and prompt, strong responses are necessary."

The material supply index, which hit this year's lowest point in July (53.9), showed a gradual recovery from August but fell again this month (62.5), down 18.5 points from the previous month. KHIRI analyzed that this decline was due to the recent Cargo Solidarity strike.

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