January Pre-Sale Market Outlook at 76.2... Incheon and Gyeonggi Among Seoul Metropolitan Area Seeing Wider Declines

[Asia Economy Reporter Ryu Tae-min] Negative outlooks for the nationwide housing pre-sale market appear to be growing stronger from the start of the new year.

According to the Korea Housing Industry Institute (KHII) on the 18th, the January nationwide Housing Sale Sentiment Index (HSSI) forecast dropped 12.2 points (p) from the previous month to 76.2. The HSSI is an index compiled by surveying housing developers about their outlook on the pre-sale market. A figure below the baseline of 100 indicates a negative market outlook.

KHII analyzed that in the metropolitan area pre-sale market, the decline was significant in Incheon and Gyeonggi regions, excluding Seoul. Daegu recorded its lowest level ever due to an expansion of supply risk impacts.

Seoul recorded 85.0, down 9.2p from the previous month. This is the first time in 15 months since October 2020 that Seoul’s forecast has fallen below the 90 mark. Incheon recorded 76.0, down 15.6p from the previous month, and Gyeonggi showed 74.4, down 17.3p from the previous month.

By region, Ulsan (91.6) and Sejong (90.9) showed high figures, while Busan (86.3), Gangwon (80.0), Jeonbuk (83.3), and Jeju (86.6) recorded scores in the 80s. As the outlooks for the metropolitan area and some other metropolitan cities declined, the gap in outlooks between the metropolitan area, metropolitan cities, and other regions narrowed. Daegu (39.1) fell to the 30s, marking the lowest forecast level since the survey began.

A KHII official stated, “While the nationwide pre-sale market was favorable in the first half of last year, significant regional disparities have appeared since the second half. Negative perceptions among developers are increasing mainly in Incheon, Gyeonggi, and some metropolitan cities where supply was abundant.”