Housing Market Outlook Improving in the Seoul Metropolitan Area: "Preference for Core Locations in Seoul Remains Strong" [Real Estate AtoZ]

Seoul Metropolitan Area Rises by 16.8 Points... Seoul Up 28.2 Points
"Recovery Gathers Momentum Again in August"

The nationwide Housing Business Sentiment Index saw a slight decline, but a partial recovery was observed, particularly in the Seoul metropolitan area.

According to the Housing Industry Research Institute (HIRI) on September 16, the Housing Business Sentiment Index for September, based on a survey of housing business operators, was recorded at 75.0, down 1.0 points from the previous month. If the index exceeds the baseline of 100, it indicates that a higher proportion of companies expect the housing business market to improve.

The Seoul metropolitan area recorded 83.4, an increase of 16.8 points. Seoul, Gyeonggi, and Incheon rose by 28.2 points, 17.2 points, and 4.8 points, respectively.

HIRI explained, "In Seoul, the preference for core locations has remained solid, which has led business operators to evaluate the housing business environment positively. Although the upward trend temporarily slowed in July due to the June 27 measures that limited housing mortgage loans in the metropolitan and regulated areas to 600 million won or less, the recovery gained momentum again in August and has been strengthening."

HIRI added, "On the other hand, in certain areas such as Pyeongtaek, Icheon, and Anseong, an excessive amount of unsold housing inventory has delayed the recovery of business conditions. Furthermore, as the government's support measures for unsold homes have mainly focused on non-metropolitan areas, the metropolitan area may be somewhat neglected, which could act as a factor limiting the recovery in some regions going forward."

The non-metropolitan area index was projected at 73.2, down 4.8 points. Metropolitan cities fell by 5.6 points to 76.6, while provincial regions dropped by 4.1 points to 70.7.

Among metropolitan cities, Daejeon recorded the largest increase, rising by 9.8 points, followed by Ulsan with 5.7 points and Daegu with 0.6 points. In contrast, Busan dropped by 18.2 points, while Sejong and Gwangju fell by 17.3 points and 14.6 points, respectively.

In the provincial regions, North Gyeongsang rose by 8.5 points, South Gyeongsang by 5.5 points, and South Chungcheong by 3.6 points. North Chungcheong and North Jeolla declined by 23.4 points and 18.2 points, respectively.

HIRI assessed, "The non-metropolitan index has continued to decline since July. There were expectations of a recovery just before the implementation of lending regulations, but after the regulations took effect, the index has failed to rebound and remains sluggish."

HIRI further added, "This is due to the prolonged structural stagnation caused by a lack of momentum for a rebound in housing prices, weak demand, and the concentration of unsold units in regional areas."

Meanwhile, the nationwide funding index for September was projected at 84.8, up 13.6 points from the previous month, and the materials supply index was forecast at 93.3, up 0.1 points.

HIRI stated, "This result reflects expectations that, along with lower interest rates, the government will officially launch financial support measures to stimulate the construction industry. The supply of construction materials also remains relatively stable."