The national dwellings business sentiment index showed a slight increase. In particular, the metropolitan area rose significantly, leading the national increase.
According to the results of a survey conducted on housing operators by the Korea Institute of Housing Industry (KIH), the national dwellings business sentiment index for May is projected at 89.6. This represents a 4.1-point increase from the previous month (85.5).
The baseline for the national dwellings business sentiment index is 100, which indicates a higher percentage of housing-related companies expecting an improvement in the market when it exceeds that number. If it does not exceed 100, the opposite is true.
The metropolitan area is projected to rise by 20.2 points to 104.4. Incheon saw a rise of 21.6 points (75.0→96.6), Gyeonggi increased by 20.0 points (80.0→100.0), and Seoul rose by 19.0 points (97.6→116.6), reflecting a significant increase across the metropolitan area. In particular, Seoul is analyzed to have significantly surpassed the baseline, driving the recovery in the metropolitan area.
A KIH official noted, "The freeze on the base rate and the entry of loan rates into the 3% range, along with the expansion of purchasing power centered on actual demand, seem to have influenced the index increase and led to a recovery in major areas of Seoul and the metropolitan area." The official added, "Especially in March, housing transaction volume in Seoul significantly increased compared to February (10,338 cases), reaching about 15,000 cases, and the metropolitan area's permits also rose by 45.3% compared to the same month last year, showcasing an overall favorable market that positively affected operators' sentiment."
The non-metropolitan areas are projected to rise by 0.6 points to 86.4, with Gwangju showing the largest increase at 23.6 points (70.5→94.1), while North Gyeongsang recorded the largest decrease at 22.4 points (91.6→69.2). The metropolitan cities are projected to rise by 4.6 points to 90.9, while rural areas are projected to fall by 2.4 points to 83.1.
Among the metropolitan cities, the increases were led by Gwangju at 23.6 points (70.5→94.1), Sejong at 18.7 points (100.0→118.7), Daegu at 6.1 points (77.2→83.3), and Busan at 4.5 points (81.8→86.3), while Ulsan at 13.4 points (100.0→86.6) and Daejeon at 11.8 points (88.2→76.4) experienced declines.
In rural areas, the increases were led by North Jeolla at 9.8 points (81.8→91.6), South Gyeongsang at 5.0 points (86.6→91.6), and Jeju at 2.1 points (81.2→83.3), while North Chungcheong and South Jeolla remained the same as the previous month. North Gyeongsang saw a decrease of 22.4 points (91.6→69.2), Gangwon decreased by 13.3 points (83.3→70.0), and South Chungcheong fell by 0.5 points (92.8→92.3).
Meanwhile, the national funding index for May showed a decrease of 1.3 points to 79.3 compared to the previous month, while the material supply index recorded an increase of 3.3 points to 96.2.
KIH noted, "Despite expectations of a reduction in the base rate, the actual procurement interest rates remain high and factors such as the increase in the construction industry's insolvency and strengthened management of project financing have resulted in no improvement in funding conditions, leading to a slight drop in the funding index." KIH added, "The materials supply index rose, which is analyzed to be due to the increase in prices of major imported raw materials stemming from the recent rise in the won-dollar exchange rate, although the domestic construction market is seeing a decrease in demand due to sluggish starts, leading to a stable downward trend in material prices."