January Housing Business Sentiment Declines... Seoul Excluded, Metropolitan Area Rises Uniformly

Jusanyeon, January Housing Business Sentiment Index Forecast

[Asia Economy Reporter Kwak Min-jae] The housing business outlook for January is expected to decline compared to last month. However, due to the impact of the deregulation of designated areas announced by the government on November 10 last year, the overall metropolitan area is forecasted to rise.

January Housing Business Sentiment Index Trends. [Image provided by Housing Industry Research Institute]

According to the 'January Housing Business Outlook Index' released by the Housing Industry Research Institute (Jusan-yeon) on the 16th, the national outlook index for this month was 55.8, down 3.5 points from the previous month.

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 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.

Despite the nationwide decline, the metropolitan area was forecasted to rise slightly by 0.1 points from the previous month to 46.8. Seoul recorded 46.9, down 7.6 points from the previous month, but Incheon and Gyeonggi rose by 6.4 points and 1.6 points to 45.7 and 47.9, respectively. Jusan-yeon analyzed that this is likely because some parts of Incheon and Gyeonggi (excluding Gwacheon, Seongnam, Hanam, and Gwangmyeong) were deregulated from designated areas announced by the government on November 10.

In particular, Sejong City, which was also deregulated from designated areas along with some parts of the metropolitan area, rose sharply by 18.1 points to 76.9, continuing the steep upward trend following last year's increase of 35.3 points.

In the provinces, the average index fell by 4.3 points. Regions with significant declines include metropolitan cities in the Gyeongbuk and Gyeongnam areas and the Gangwon and Chungnam regions, with Busan down 13.6 points, Daegu down 10.7 points, Ulsan down 11.8 points, Gangwon down 14.7 points, and Chungnam down 11.1 points compared to the previous month. This appears to be a correction following the sharp rise in these regions due to expectations from the full deregulation of non-metropolitan designated areas in November.

The January financing procurement index rose 5.1 points to 50.0. Jusan-yeon stated, "This is due to increased expectations following the financial regulatory easing measures led by the Financial Services Commission in the November 10 policy and the real estate market soft landing measures announced in the December 21 economic operation plan." However, they added, "Since there are complex issues such as mutual impacts from real estate-related PF loans by financial companies, it will take considerable time to recover liquidity as before."

The January material supply index also rose by 8.7 points to 71.2. Although the material supply index fell last month due to the Cargo Solidarity strike, Jusan-yeon analyzed that the domestic material supply chain has normalized after the strike ended, and raw material prices such as oil have turned downward.

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