Metropolitan Area Apartment Pre-Sale Outlook Index Soars... "Seoul Home Price Gains Spread to Surrounding Areas" [Real Estate AtoZ]

Apartment in Seoul. Photo by Yonhap News Agency

As home prices continue to rise, particularly in Seoul’s key districts, the apartment pre-sale outlook index for the Seoul metropolitan area has seen a significant increase this month.

According to the Housing Industry Research Institute (HIRI), a survey of housing developers showed that the nationwide apartment pre-sale outlook index for January stood at 80.4, up 14.1 points from the previous month, as announced on January 8. The index for the Seoul metropolitan area rose by an even greater margin, climbing 22.1 points to reach 89.2. In non-metropolitan areas, the index increased by 12.5 points to 78.6. The pre-sale outlook index is a quantified indicator based on surveys of housing developers regarding the conditions of apartment complexes about to be, or currently being, offered for pre-sale. An index above 100 indicates a positive outlook for pre-sales, while a figure below 100 suggests the opposite.

Within the metropolitan area, Seoul recorded a 15.3-point increase to 97.1, Incheon rose by 34.1 points to 82.1, and Gyeonggi Province increased by 16.8 points to 88.1.

HIRI explained, "All areas in the metropolitan region saw significant increases. This appears to be due to expectations that the recent upward trend in home prices in Seoul’s core districts will spread to surrounding areas, positively impacting the pre-sale market, despite the strong anti-speculation measures introduced in the October 15 Housing Market Stabilization Plan." The institute added, "Although the housing price index in Incheon had been declining continuously since November 2024, it rose for two consecutive months starting in October last year, fueling expectations of a turnaround in the home price trend."

In non-metropolitan regions, most areas also saw increases: Gwangju rose by 27.0 points, Gyeongnam by 19.0 points, Jeju by 18.8 points, and Jeonbuk by 15.0 points.

HIRI noted, "Although the apartment pre-sale outlook index in all regions nationwide still remains below the baseline of 100, making it difficult to view the pre-sale outlook as positive, concerns about further deterioration have eased compared to the previous month."

The institute further explained, "With the scarcity of new apartments becoming more pronounced due to insufficient supply, and as the phenomenon of listings drying up and rising jeonse prices drive up home prices in provincial metropolitan cities, expectations for the future apartment pre-sale market have somewhat improved."

The pre-sale price outlook index rose by 12.7 points to 114.3, while the pre-sale supply outlook index increased by 7.8 points to 92.2. The unsold inventory outlook index is expected to decline by 4.7 points.

HIRI added, "The continued high exchange rate over the past two months has led to increased prices for imported construction materials due to the weaker won, as well as higher costs associated with rising interest rates. In addition, the recent spread of home price increases in both the metropolitan area and provincial metropolitan cities has raised expectations for expanded pre-sale supply."