September Housing Business Outlook Index for Capital Area Improves Driven by Rising Home Prices

Housing business prospects for the greater Seoul metropolitan area have improved slightly, fueled by rising housing prices in the region and expectations surrounding the government's supply measures.

The Korea Housing Industry Research Institute announced today (the 15th) that a survey of housing builders showed the housing business outlook index for the metropolitan area in September rose by 3.1 points from the previous month to 89.2.

An index reading above the baseline of 100 means that the proportion of companies with an optimistic outlook on the market is higher than those with a pessimistic view.

A reading below 100 indicates the opposite.

Seoul (97.2) rose by 4.4 points and Gyeonggi Province (91.1) increased by 7.4 points, while Incheon (79.3) was projected to drop by 2.5 points.

The institute stated, "The upward trend in trading prices continued centered around areas dense with mid- to low-priced housing, such as Nowon and Jungrang districts in Seoul, and the upward momentum expanded in the southern parts of Gyeonggi Province, which are influenced by the booming semiconductor industry." It added, "Expectations for supply stimulation and improved business conditions following the August 13 measures also contributed to a slight rise in the metropolitan index."

However, uncertainties such as continued financial burdens from mortgage regulations and rising market interest rates, as well as a decline in housing transaction volume in the metropolitan area, were cited as factors limiting further improvements in the business outlook.

Outside the metropolitan area, the index (77.9) fell by 11.2 points.

Most regions were projected to decline, including Jeju (60.0, down 32.8 points), Ulsan (75.0, down 25.0 points), and North Chungcheong Province (62.5, down 25.0 points).

Although the index had risen over the past few months due to hopes for the spread of an upward trend from the capital area, it suffered a sharp decline due to the announcement of heavy taxation policies on multiple-home owners, the accumulation of unsold properties, and persistent weak demand.

The nationwide index was projected at 79.9, down 8.7 points.

The funding index for September stood at 75.4, up 2.0 points from the previous month.

This is interpreted as a reflection of expectations for improved funding conditions, as the August 13 measures included plans to strengthen financial support for housing supply projects, such as project financing (PF) guarantees, expanded fund supply, and reduced guarantee fees.

The material supply and demand index was projected to fall by 6.6 points to 88.7, affected by diminished expectations for an end to the war in Iran, rising construction costs, and persistent price burdens for major construction materials such as reinforcing bars.

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.