Seoul Housing Move-in Outlook Soars... "Spread of House Price Increase Trend and Interest Rate Cut Expectations"

There is a forecast that the nationwide apartment sales market will improve significantly this month.

The Korea Research Institute for Human Settlements (KRHIS) announced on the 8th that, according to a survey of developers, the apartment sales outlook index for this month rose by an average of 11.1 points nationwide compared to the previous month, reaching 84.0.

This index is a numerical indicator created by KRHIS by surveying housing developers about the conditions of complexes that are about to be sold or currently on sale. It ranges from 0.0 to 200.0. An index above 100.0 indicates a positive sales outlook, while below 100.0 indicates the opposite.

In particular, the metropolitan area showed a significant improvement. The metropolitan area rose 26.3 points from 73.4 last month to 99.7 this month, and the non-metropolitan area also increased by 7.8 points from 72.8 to 80.6. Within the metropolitan area, Seoul rose 22.6 points from 85.7 to 108.3, while Gyeonggi and Incheon increased by 27.3 points and 28.8 points, respectively.

KRHIS stated, "The apartment sales outlook index in the metropolitan area has risen sharply overall. This is analyzed as a result of a combination of factors including the lifting of land transaction permit zones, which triggered a rise in housing prices centered on the Gangnam 3 districts, spreading to major metropolitan areas, the arrival of the spring moving season, and expectations of interest rate cuts."

They added, "However, since the Gangnam 3 districts and Yongsan district were re-designated as expanded land transaction permit zones from the 24th of last month, and from the 4th of this month, the one-year extension and approval of land transaction permit zones for redevelopment project areas in Apgujeong, Yeouido, Mokdong, and Seongsu, it remains to be seen how these will affect the apartment sales market going forward."

In the non-metropolitan areas, Ulsan is expected to rise by 32.2 points, Busan by 30.3 points, and Jeonbuk by 17.5 points. Jeju is predicted to decline by 7.4 points, Chungbuk and Jeonnam by 6.0 points, and Gwangju by 3.9 points. Gyeongbuk remained the same as the previous month.

Meanwhile, the sales price outlook index rose by 2.2 points, and the sales volume outlook index increased by 9.0 points. However, the unsold inventory outlook index fell by 17.6 points.

Regarding the rise in the sales price outlook index, KRHIS explained, "It appears to be due to concerns that political uncertainties such as delays in the impeachment trial verdict and uncertainties from U.S. tariffs will cause inflation and exchange rate increases, leading to higher prices for imported raw materials."

Regarding the sales volume outlook index, they said, "The decline in mortgage loan interest rates and partial easing of mortgage loan regulations seem to have led to the resumption of postponed sales timed with the spring moving season." However, they also noted, "Since November last year, the index has not exceeded the baseline (100.0) for six consecutive months, so the sales volume outlook remains negative."

As for the decline in the unsold inventory outlook index, KRHIS stated, "This seems to be influenced by optimistic expectations that the rapid price rise in the Gangnam 3 districts will spread to surrounding areas and by hopes for demand recovery due to eased local loan regulations." They added, "It is also affected by the Korea Land and Housing Corporation (LH) policy starting this month to purchase 3,000 unsold apartments after local completion, and the significant decrease in this year's sales volume."