Housing Business Outlook for July Surges..."Semiconductor Boom Drives Gyeonggi, Honam, Chungcheong"

Rising Expectations in Both Metropolitan and Non-metropolitan Areas
Semiconductor Industry Momentum Drives Positive Outlook

The Housing Business Outlook Index for July surged by more than 10 points compared to the previous month. In particular, Gyeonggi Province and the Honam and Chungcheong regions recorded a sharp increase, centered around areas near semiconductor industrial sites.

On July 14, the Housing Industry Research Institute announced the results of its survey of housing business operators, which showed that the nationwide Housing Business Outlook Index for this month stood at 89.3, up 12.2 points from the previous month. The Seoul metropolitan area rose by 23.5 points to 101.6, while non-metropolitan regions climbed 9.7 points to 86.6.

If the index is above the baseline of 100, it indicates that more housing business operators expect conditions to improve. If it is below 100, a majority expect the housing business environment to worsen.

Apartment complex area near Dongtan Station, Hwaseong City, Gyeonggi Province. Photo by Yonhap News

Uptrend Centered on Semiconductor Sites in the Greater Seoul Area...Continued Increase in Apartment Sale and Lease Prices

In the Seoul metropolitan area, Gyeonggi Province rose by 29.4 points to 105.7, Incheon climbed by 25.6 points to 86.2, and Seoul increased by 15.6 points to 113.1.

The Housing Industry Research Institute analyzed, "In the Seoul metropolitan area, apartment sale and lease prices continued to rise last month, and both Seoul and Gyeonggi Province outperformed the baseline, which led to a significant improvement in sentiment. In particular, Gyeonggi Province, led by areas such as Hwaseong Dongtan near semiconductor business sites, saw growth in transaction volumes and prices, which drove the index higher."

They added, "An increase in overall liquidity, inflows of investment returns due to an active stock market, and expectations of further housing price rises have also had a positive impact on the outlook."

Outlook Improves as Large-Scale Semiconductor Clusters Planned in Non-metropolitan Regions

In non-metropolitan areas, metropolitan cities rose by 11.1 points to 91.5, with provincial regions up by 8.6 points to 82.9.

Among metropolitan cities, Gwangju saw the largest rise of 20.8 points, reaching 94.4. This was followed by Sejong with an increase of 15.4 points and Busan with 13.3 points.

For provincial regions, Chungnam recorded the largest gain of 21.5 points, followed by Jeonnam with 16.4 points and Jeonbuk with 15.4 points.

Expectations of improvement were widespread for most non-metropolitan areas, but Gyeongnam was the only region to decline, dropping by 8.8 points.

The Housing Industry Research Institute explained, "In particular, the Honam and Chungcheong regions saw a sharp increase in the index, as expectations for a recovery in housing demand grew with the announcement of plans for large-scale semiconductor clusters."

They also noted, "Although the upward trend in housing prices in the greater Seoul area combined with these positive regional developments has improved outlooks, the index in most regions is still below the standard value of 100.0. In some areas, such as Gyeongnam, a continued burden of unsold housing and sluggish demand keeps concerns about the depression of local housing markets alive."

Indexes for Funding and Materials Supply Also Rise Across Board

Meanwhile, the nationwide funding index for July was forecast at 78.6, up 9 points from the previous month, while the materials supply index rose by 15.5 points to 93.2.

The Housing Industry Research Institute commented, "The increase in the funding index as perceived by housing business operators is likely due to the continued increase in housing prices and transactions in the Seoul metropolitan area, which boosts market recovery expectations. However, the recent rise in prevailing market interest rates has led to greater cost burdens for business operators, and the delay in capital recovery due to unsold units continues, so the real funding burden remains high."

The institute further stated, "The rise in the materials supply index appears to reflect the fact that international oil prices have fallen to pre-Middle East war levels, easing concerns over the cost of raw materials and transportation to some extent. However, Middle East geopolitical circumstances remain unstable, and the won-dollar exchange rate is still high, leaving import materials costly. Additionally, the burden of high construction costs continues."

This content was produced with the assistance of AI translation services.