Has the October 15 Measures Lost Their Effect?... Housing Business Outlook Rebounds in Just One Month

December Housing Business Sentiment Index Up 8.8 Points
Greater Seoul Area Rises 20.4 Points from Previous Month
Sales Prices Increase in Major Redevelopment Complexes

The outlook for housing business operators, which had declined following the October 15 measures that designated all of Seoul as a speculative overheating zone, showed signs of recovery within a month.

The Housing Industry Research Institute (HIRI) announced on December 16 that, based on a survey of housing business operators, the Housing Business Sentiment Index for December recorded 74.7, up 8.8 points from the previous month.

If this index exceeds the baseline of 100, it indicates that more companies expect the housing business environment to improve.

The Seoul metropolitan area recorded 84.5, up 20.4 points from the previous month. Seoul rose by 23.3 points to 95.0, Gyeonggi Province increased by 16.6 points to 79.4, and Incheon climbed by 21.7 points to 79.3, respectively.

HIRI analyzed, "Although transaction volumes have not yet clearly recovered due to strict lending regulations, the designation of regulated areas, and the implementation of the land transaction permit system, business sentiment has improved as sales prices have risen, particularly in major redevelopment complexes in Seoul and popular districts such as Songpa, Dongjak, and Yeongdeungpo."

The non-metropolitan index is projected to reach 72.5, up 6.2 points. HIRI explained, "The improvement in the index is also interpreted as being influenced by the fact that, after the designation of regulated areas in the metropolitan area under the October 15 measures, some demand shifted to major cities in the provinces, resulting in differentiated recovery strengths by region."

This month, the nationwide funding procurement index is projected to fall by 4.6 points from the previous month to 68.8. This appears to be due to deteriorating funding conditions caused by concerns over real estate project financing insolvencies and an increase in loan delinquencies.

The materials supply index fell by 2.0 points to 94.6. The drop in the materials supply index was analyzed as being due to the recent sharp rise in the won-dollar exchange rate, which has fluctuated above 1,470 won, thereby increasing the burden of imported material prices.