The outlook for housing developers has improved, with the Greater Seoul housing market turning optimistic for the first time in three months. This shift is attributed to rising housing prices, particularly in the outskirts of Seoul and Gyeonggi Province, which has heightened expectations for better business conditions.
On October 20, the Korea Housing Industry Research Institute reported that the national housing market outlook index for October rose by 6.5 points from the previous month to 86.4.
The housing market outlook index quantifies the sentiment of housing developers regarding market conditions. A score below the benchmark of 100 indicates that more developers expect the market to worsen than improve.
The Greater Seoul outlook index recorded a significant increase of 11.0 points to reach 100.2, surpassing the benchmark for the first time in three months. The index had previously fallen below the benchmark, recording 101.6 in July, followed by 86.1 in August and 89.2 in September.
Regionally, Seoul's index rose from 97.2 to 110.0, an increase of 12.8 points, marking a return to optimism for the first time since July (113.1). Incheon saw an increase from 79.3 to 90.6, up 11.3 points, while Gyeonggi Province rose from 91.1 to 100.0, an increase of 8.9 points.
The Korea Housing Industry Research Institute noted, "The continued rise in housing prices in the outskirts of Seoul and Gyeonggi Province has contributed to the significant increase in the index, despite a slowdown in transactions in the Gangnam area and some regions along the Han River. However, demand remains steady in mid- to low-priced areas."
The outlook index for non-Greater Seoul areas also improved, rising by 5.5 points to 83.4. Ulsan experienced the largest increase, soaring 32.1 points to 107.1, while Busan (up 26.2 points), North Chungcheong (up 17.5 points), and Daejeon (up 13.5 points) also showed improvements. Conversely, Gangwon (-12.6 points), South Gyeongsang (-9.6 points), and Sejong (-6.7 points) saw declines.
The research institute attributed the positive sentiment in Ulsan to the strong shipbuilding industry and the revitalization of the semiconductor sector in North Chungcheong. However, it cautioned that aside from Ulsan and Gwangju, all other regions in non-Greater Seoul areas remain below the benchmark of 100. Given the ongoing sluggish demand in local housing markets and the backlog of unsold properties, the increase in some regions' indices cannot be viewed as a sign of overall market recovery.
Expectations for financing and material supply conditions have also improved. The national financing index for October rose by 5.4 points to 80.8, while the material supply index increased by 6.4 points to 95.1.
The Korea Housing Industry Research Institute stated, "The expansion of project financing guarantees and reductions in guarantee fees under the August 13 measures have likely contributed to the improved expectations for financing conditions. Despite rising interest rates increasing the burden of debt, these financial support measures appear to have positively influenced developer sentiment."
* This article has been translated by AI.
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