The housing market outlook has significantly weakened as concerns grow over unsold inventory in regional areas and tightening financial regulations. In contrast, Seoul's housing market remains buoyed by rising property prices, maintaining a benchmark outlook index of 100, highlighting a stark divide between the capital and other regions.
On June 9, the Korea Housing Industry Research Institute reported that the national apartment housing outlook index for June is 69.4, a drop of 10.6 points from the previous month’s 80.0.
The housing outlook index is based on a scale where a score above 100 indicates a positive outlook among developers, while a score below 100 reflects a prevailing negative sentiment.
Regionally, the Seoul metropolitan area saw a slight decline from 85.6 to 84.3, a decrease of 1.3 points, while non-metropolitan areas plummeted from 78.8 to 66.2, a drop of 12.6 points.
Seoul has recorded a score of 100.0 for two consecutive months, attributed to a shift in demand from rental to purchase amid ongoing price increases.
According to the Korea Real Estate Agency, apartment prices in Seoul rose by 0.31% in the third week of May, marking the largest increase in 16 weeks, followed by an additional rise of 0.25% thereafter.
However, the research institute noted that government policies aimed at curbing speculation, stricter lending regulations, and rising construction costs have not significantly boosted market expectations.
In the metropolitan area, Incheon fell from 75.0 to 72.4, a decrease of 2.6 points, while Gyeonggi Province dropped from 81.8 to 80.6, down 1.2 points.
In non-metropolitan areas, all regions except Jeonbuk (81.8) experienced declines in their outlook indices. Gwangju saw the largest drop, falling from 80.0 to 55.6, a decrease of 24.4 points. Other notable declines included Daegu (-19.7 points), Daejeon (-18.9 points), Busan (-16.6 points), Chungnam (-15.6 points), and Gyeongbuk (-13.2 points).
The Korea Housing Industry Research Institute stated, "The ongoing polarization between the metropolitan and non-metropolitan markets, along with concerns over unsold inventory, rising construction costs, and tightening financial regulations, has led to a general decline in developers' expectations for the housing market."
Meanwhile, according to Real Estate 114, the total number of apartments scheduled for sale nationwide in June is expected to reach 39,202 units, the highest monthly figure this year. Construction companies, having postponed their schedules ahead of local elections, are now ramping up supply in both metropolitan and non-metropolitan areas, which is more than six times the amount compared to the same month last year.
* This article has been translated by AI.
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