Expectations among developers for the national apartment sales market have declined for the second consecutive month, while Seoul's outlook index has risen above the benchmark of 100 for the first time in three months. The ongoing rental crisis and rising apartment prices have boosted optimism in the metropolitan area, while negative forecasts are spreading in provincial regions due to unsold inventory and weakened demand.
On October 13, the Korea Housing Industry Research Institute reported that the national apartment sale outlook index for October is 82.3, down 4.0 points from the previous month’s 86.3.
An index above 100 indicates that more developers have a positive outlook for the future sales market, while an index below 100 suggests a prevailing negative outlook.
Regionally, the metropolitan area saw an increase from 84.0 to 92.0, an 8.0-point rise, while non-metropolitan areas dropped from 86.8 to 80.2, a decline of 6.6 points.
In particular, Seoul recorded a significant increase of 11.8 points from the previous month’s 93.9 to 105.7, surpassing the benchmark of 100 for the first time in three months. Incheon rose from 74.1 to 83.3, a 9.2-point increase, and Gyeonggi increased from 83.9 to 86.8, a 2.9-point rise, but both still remain below the benchmark.
This improvement in developer expectations is attributed to the ongoing rental crisis and rising apartment prices, particularly in non-Gangnam areas of Seoul, despite the financial burden from recent interest rate hikes and lending restrictions.
According to the Korea Real Estate Agency, apartment sale prices in the metropolitan area rose by 0.14% in the first week of October compared to the previous week, with Seoul's prices increasing by 0.12%. This marks the 87th consecutive week of rising apartment prices in Seoul.
Conversely, in non-metropolitan areas, the sale outlook index fell in all regions except Jeonnam and Sejong. Gyeongbuk experienced the largest drop, falling 23.5 points from 100.0 to 76.5. Other significant declines were seen in Gangwon (-13.3 points), Gyeongnam (-11.2 points), Daejeon (-11.1 points), and Busan (-9.7 points).
Additionally, Ulsan and Chungbuk fell by 7.1 points each, while Daegu dropped 6.4 points, Chungnam 6.0 points, Jeonbuk 5.4 points, Gwangju 5.3 points, and Jeju 4.4 points. In contrast, Jeonnam rose from 60.0 to 76.9, a 16.9-point increase, and Sejong increased from 92.3 to 93.3, a 1.0-point rise.
The Korea Housing Industry Research Institute stated, "The decline in the outlook index across metropolitan and provincial areas appears to be due to the burden of financing caused by lending restrictions, alongside the ongoing unsold inventory and weakened housing demand. Recent trends show that apartment sale prices in provincial areas are stabilizing, contrasting with the metropolitan area."
The institute added, "It is essential to monitor the impact of the Bank of Korea's upcoming interest rate decision on October 22, the National Assembly's review of tax reform proposals, and the government's housing supply policies, including the announcement of new public land sites in the metropolitan area, as well as the trends in unsold inventory in provincial areas on the sales market."
* This article has been translated by AI.
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