January Unsold Housing Units Expected to Decrease After Four Months... "Reflecting Optimism on Deregulation"

Jusanyeon January Apartment Unsold Inventory Outlook Index 129.9
Down 5.9 Points from Previous Month...Turning to Decline After 4 Months

[Asia Economy Reporter Kwak Min-jae] The unsold housing inventory is expected to decrease this month for the first time in four months. This is analyzed as reflecting expectations for a soft landing measure in the housing market following the government's successive announcements of deregulation policies.

Source: Korea Research Institute for Human Settlements

According to the Korea Housing Industry Research Institute (hereinafter KHIRI) on the 10th, the apartment unsold inventory forecast index for January recorded 129.9, down 5.9 points from last month (135.8). KHIRI explained, "As the government’s deregulation policies such as easing and lifting restrictions on pre-sale rights transfer, relaxation of interim payment loan regulations, and abolition of mandatory residence obligations have been announced one after another, developers are adjusting their sales schedules, which is expected to affect future sales volume and unsold inventory."

The index survey is conducted targeting members of the Korea Housing Association and the Korea Housing Builders Association for the purpose of comprehensive judgment of the sales market and supporting stable sales market management.

The sales price forecast index was 81.2, showing a decrease of 9.6 points from last month. This is interpreted as reflecting the deepening transaction freeze due to the sharp interest rate hikes. However, KHIRI analyzed that the decline in sales prices will be limited due to rising construction and labor costs and the large-scale lifting of the price ceiling system in applicable areas. The sales volume forecast index was 70.1, an increase of 1.9 points compared to last month.

Source=Korea Housing Institute

The nationwide apartment sales forecast index for this month is expected to rise by 6.3 points from the previous month to 58.7. Despite the continuous recovery trend since October, the national average index still remains at a low level.

Along with expectations for deregulation by the government, the forecast index rose in most local regions. Gyeongnam (71.4) and Gangwon (70.0) increased sharply by more than 20 points compared to the previous month. Jeonnam (68.7), Gyeongbuk (66.6), Chungbuk (61.5), Sejong (64.2), Chungnam (60.0), and Jeonbuk (71.4) also rose by more than 10 points.

KHIRI stated, "Last year, the government announced a comprehensive plan including tax and financial measures and deregulation for normalizing the housing market in the ‘2023 Economic Policy Direction,’ and it seems that the expectation sentiment for the soft landing measures in the housing market, such as the full lifting of regulated areas announced in the Ministry of Land, Infrastructure and Transport’s work report on the 3rd, is reflected." Regarding regions where the index rose significantly such as Gyeongnam and Gangwon, it added, "Gyeongnam reflects regional economic recovery due to an increase in local manufacturing production, and Gangwon’s sales forecast rose due to regional development issues such as the relocation of the Gangwon Provincial Office."

The apartment sales forecast index in the metropolitan area is expected to decrease by 1.4 points compared to the previous month. Gyeonggi (48.7) is expected to decrease by 2.5 points, Seoul (43.9) by 3.3 points, and Incheon (39.2) by 3.2 points.

KHIRI said, "Although the forecast index recovered above the 50-point mark in most parts of the country this month, only the metropolitan area is expected to remain below 50," adding, "It is necessary to observe further how the 1st and 3rd real estate deregulation measures will affect the sales forecast in the metropolitan area."

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