Expectations among businesses watching the construction and sales market for dwellings nationwide rose sharply in a month.
On the 14th, a survey by Korea Housing Institute of housing developers showed that the nationwide housing business outlook index for July rose 12.2 points from the previous month to 89.3.
Gains were especially notable in the greater Seoul area, including Seoul and Gyeonggi. The greater Seoul outlook climbed 23.5 points from a month earlier to 101.6, surpassing the 100 baseline that indicates a recovering market. Non-capital regions, including the provinces, also rose 9.7 points from the previous month to 86.6.
Looking at detailed figures for the greater Seoul area, Gyeonggi jumped the most, up 29.4 points (from 76.3 to 105.7), followed by Incheon, up 25.6 points (from 60.6 to 86.2), and Seoul, up 15.6 points (from 97.5 to 113.1).
Korea Housing Institute said, "With the rise in apartment sale and jeonse prices continuing in June, sentiment improved markedly in both Seoul and Gyeonggi," adding, "In particular, Gyeonggi appears to have led the index higher as transaction volume and prices climbed together, centered on the hinterlands of semiconductor business sites such as Hwaseong Dongtan." It added, "We also judge that increased overall liquidity, the influx of investment returns amid a buoyant securities market, and expectations for dwelling price gains worked positively for the outlook."
Non-capital regions also showed a recovery tone during July. Metropolitan cities were projected at 91.5, up 11.1 points, and provincial areas came in at 82.9, up 8.6 points. Among metropolitan cities, Gwangju posted the largest increase at 20.8 points, followed by ▲ Sejong (15.4 points) ▲ Busan (13.3 points) ▲ Ulsan (7.2 points) ▲ Daejeon (6.5 points) ▲ Daegu (3.5 points).
Among provincial areas, South Chungcheong rose 21.5 points, with ▲ South Jeolla (16.4 points) ▲ North Jeolla (15.4 points) ▲ Jeju (8.7 points) ▲ North Gyeongsang (7.1 points) ▲ North Chungcheong (5.0 points) ▲ Gangwon (3.5 points) also recording increases. However, South Gyeongsang alone fell 8.8 points, showing a decline.
Korea Housing Institute said, "In the Honam and Chungcheong regions, the index appears to have surged as expectations for a recovery in dwelling demand grew following the announcement of plans to create large-scale semiconductor clusters," noting that while the capital region's dwelling price increases and regional positives aligned to improve the outlook, most regions' indices still remain below the baseline (100.0). "In some areas such as South Gyeongsang, the burden of unsold homes and weak demand persists, so concerns about a slump in provincial dwelling markets still remain."
Meanwhile, funding and materials supply conditions were also expected to ease somewhat. This month's funding index rose 9.0 points from the previous month to 78.6, and the materials supply index also jumped 15.5 points to 93.2.
Behind the construction industry's improved outlook for cash flow is optimism for a recovery in the sales market, driven by rising dwelling prices and increased transaction volume in the greater Seoul area. However, the burden of interest expense from still-high lending rate continues, and with unsold inventory hindering smooth recovery of construction funds, on-the-ground financial pressure remains.
As for materials supply, with global oil prices stabilizing, the burden from raw material supply and rising logistics costs has eased somewhat, sharply improving the index. Still, due to unstable conditions in the Middle East and a high won-dollar exchange rate, unit price pressure on imported materials remains, and the burden from high construction costs continues.