"Effect of Eased Resale Restrictions"... Housing Market Outlook Rises for 6 Consecutive Months

Apartment sales sentiment has improved for six consecutive months, recovering to the 80-point level. This is interpreted as reflecting expectations following the significant easing of resale restrictions on pre-sale rights.

[Image source=Yonhap News]

According to a survey conducted by the Korea Research Institute for Human Settlements targeting housing developers from the 21st to the 31st of last month, the apartment sales outlook index for April recorded 85.2, rising 11.6 points from last month’s 73.6. After hitting a record low of 37.1 in October last year, the index has risen for six consecutive months due to a base effect and expectations for the government’s real estate regulation easing policies, recovering to the 80-point level.

By region, the outlook index increased significantly by more than 10 points in most areas nationwide: Sejong by 28.2 points (64.7→92.9), Incheon by 23.9 points (61.3→85.2), Daejeon by 21.6 points (68.4→90.0), Daegu by 18.9 points (57.1→76.0), Gyeongnam by 16.1 points (70.6→86.7), Jeju by 15.3 points (72.2→87.5), Gyeonggi by 14.5 points (72.7→87.2), Gangwon by 12.6 points (69.2→81.8), Ulsan by 11.8 points (70.6→82.4), and Jeonnam by 11.7 points (82.4→94.1).

Jeonbuk rose by 7.6 points (85.7→93.3), Gwangju by 7.5 points (71.4→78.9), Busan by 6.3 points (72.0→78.3), Seoul by 4.3 points (82.2→86.5), and Chungnam by 4.9 points (83.3→88.2) also showed slight increases.

On the other hand, Chungbuk was the only region nationwide expected to see a decline of 8.8 points (85.7→76.9), which appears to be a base effect from having the highest outlook last month (85.7). Gyeongbuk remained unchanged at 82.4 compared to last month.

[Image courtesy of Housing Industry Research Institute]

The Korea Research Institute for Human Settlements explained, “The nationwide rise in the outlook indicates that the negative perception of the sales market, which had sharply increased since the second half of last year, has somewhat eased. This is believed to be due to the significant shortening of the resale restriction period on pre-sale rights, which directly affects the sales market under the government’s deregulation policy (maximum 10 years to 3 years in the metropolitan area, maximum 4 years to 1 year in non-metropolitan areas).”

They added, “However, since the market cannot yet be considered fully recovered, it is necessary to observe how the effects of government policies will manifest.”

This month’s unsold inventory outlook index decreased by 16.9 points from 116.9 to 100.0 but still remains at a high level. It is analyzed that the government’s significant easing of subscription regulations, such as shortening the resale restriction period and abolishing the no-quota subscription requirement, is slowing the increase in unsold inventory.

However, even though the increase in unsold inventory has slowed, the volume level is still rising. The Korea Research Institute for Human Settlements stated, “Although the increase in unsold inventory has slowed, the volume level continues to rise, so it is necessary to continuously monitor the unsold inventory status by considering regional sales market trends and sales prices.”

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