Concerns about a recession stemming from the Middle East war and the government's tougher restrictions on multiple-home owners appear to have dampened apartment presale prospects this month.
Korea Housing Institute said on the 7th that the nationwide apartment presale outlook index for April, based on a survey of dwellings business operators, came in at 60.9, down 35.4 points from the previous month.
If the presale outlook index exceeds 100, it means more operators view the outlook positively; below 100 indicates the opposite.
The nationwide average presale outlook index in April is the lowest since January 2023 (58.7).
The greater Seoul area (81.1) is projected to fall by 21.5 points (p). Seoul (97.1) fell 8.3p, Incheon (66.7) fell 29.9p, and Gyeonggi (79.4) fell 26.5p.
Outside the greater Seoul area (56.6), the average fell 38.4p. North Chungcheong (40.0) and South Jeolla (33.3) each fell 50.0p, Gangwon (45.5) fell 46.2p, and Ulsan (60.0) fell 45.9p.
Korea Housing Institute explained, "Due to simultaneous internal and external factors such as high interest rates and recession fears arising from the U.S.-Iran war, and stronger taxation and lending restrictions targeting multiple-home owners by the government, the presale outlook index fell sharply nationwide."
The April presale price outlook index (104.5) fell 3.1p from the previous month.
At the time of the survey, the raw material price increases from the Middle East war had not materialized, leading to a decline. However, Korea Housing Institute noted that naphtha prices rose about 35% in a month, increasing cost pressures on construction materials such as paint and windows, and projected that the upward trend in presale prices will expand going forward.
The presale volume outlook index recorded 89.7, down 5.8p from the previous month. The unsold volume outlook index rose 7.3p to 94.1, rebounding after three consecutive months of decline.