'Negative' Outlook Nationwide Except Seoul... October Apartment Presale Divide Widens

The capital region rose 8 points
Areas outside the capital region fell 6.6 points

The apartment presale outlook declined for a second consecutive month in October, with every region except Seoul falling below the benchmark. Despite loan restrictions and the burden of high interest rates, Seoul alone returned to positive territory for the first time in three months, buoyed by tight jeonse and monthly rental markets and rising apartment prices. Meanwhile, concerns over unsold homes deepened the divide between the capital region and the provinces.

Apartments in downtown Seoul, seen from Namsan. Yonhap News

A survey of housing businesses by the Housing Industry Research Institute on October 13 found that the nationwide Apartment Presale Outlook Index fell 4 points to 82.3 in October. The index declined for a second consecutive month, and every region except Seoul was below the benchmark of 100.

The Apartment Presale Outlook Index quantifies housing businesses' assessments of conditions at housing complexes about to be offered for sale or currently on the market. A reading above 100 indicates a positive outlook for presales, while a reading below 100 indicates a negative outlook.

The index was projected to rise 8 points in the capital region, while falling 6.6 points outside the region.

In the capital region, Seoul posted the largest increase, rising 11.8 points to 105.7. This was the first time in three months that it had exceeded the benchmark of 100.

Incheon was expected to rise 9.2 points and Gyeonggi Province 2.9 points, but their respective readings of 83.3 and 86.8 remained below the benchmark.

The institute said, "Even as financing pressures persist due to consecutive base rate hikes in July and August and ongoing loan restrictions, apartment prices have continued to rise in areas of the capital region outside the Han River belt, amid worsening jeonse and monthly rental market conditions. This appears to have improved housing businesses' expectations for the presale market."

October Apartment Sales Outlook Index. Housing Industry Research Institute

Most regions outside the capital area were expected to see declines. North Gyeongsang Province was projected to fall 23.5 points, Gangwon Province 13.3 points and South Gyeongsang Province 11.2 points, among others.

By contrast, South Jeolla Province was projected to rise 16.9 points to 76.9, while Sejong was expected to gain 1 point to 93.3.

The institute said, "Outside the capital region, the index appears to have fallen in both metropolitan cities and provinces as unsold homes continue to accumulate and housing demand remains weak, with loan restrictions adding to financing pressures. Recent market data also showed that apartment sale prices outside the capital region were unchanged as of September 28, compared with the previous week, diverging from the capital region."

The institute also said that key factors would include the Bank of Korea's base rate decision scheduled for October 22, parliamentary deliberations on the tax reform plan, and the government's progress on housing supply policies, including the announcement of new public housing sites in the capital region.

The Apartment Presale Price Outlook Index rose 5.5 points from the previous month to 114.3 in October. The institute said, "The outlook for higher presale prices has strengthened as cost pressures continue, including an increase in the Ministry of Land, Infrastructure and Transport's standard construction costs."

The Presale Volume Outlook Index was unchanged from the previous month at 97.1, while the Unsold Housing Outlook Index rose 2.7 points to 108.6. The institute said, "Expectations for the resumption of presale schedules continue as the autumn peak season gets underway. At the same time, concerns that higher base rates and ongoing loan restrictions will weaken demand for housing subscriptions have also kept the index at the previous month's level."

Regarding the Unsold Housing Outlook Index, the institute said, "Outside the capital region, housing subscription shortfalls continue, and expectations that unsold homes will increase in the future remain dominant. Three of the four areas designated for unsold-home management are outside the capital region, and differences in regional demand and presale conditions have contributed to concerns about unsold homes."

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