Home prices keep rising even as Gangnam cools — Greater Seoul housing business outlook turns positive for first time in 3 months

Housing prices in the Greater Seoul area have continued to climb, pushing homebuilders' business outlook into positive territory for the first time in three months.

According to a survey of housing developers released Tuesday by the Korea Housing Institute, the Greater Seoul housing business outlook index for October came in at 100.2, up 11.0 points from the previous month's reading of 89.2.

A reading above the baseline of 100 indicates that more companies expect business conditions to improve than to worsen.

The Greater Seoul index turned optimistic for the first time since July (101.6), three months ago. Seoul rose 12.8 points to 110.0 from 97.2, Incheon gained 11.3 points to 90.6 from 79.3, and Gyeonggi Province climbed 8.9 points to 100.0 from 91.1.

Seoul in particular posted a higher reading than the broader Greater Seoul index. "In Seoul, transactions in the three Gangnam districts and parts of the Han River belt have slowed, but rising housing prices in Seoul's outer areas and Gyeonggi Province have added to expectations of improved business conditions," a Korea Housing Institute official said.

Outside the Greater Seoul area, most regions also saw gains, with Ulsan jumping to 107.1 from 75.0, Busan rising to 90.9 from 64.7, North Chungcheong Province climbing to 80.0 from 62.5, and Daejeon advancing to 94.7 from 81.2. The non-Greater Seoul composite index rose 5.5 points to 83.4.

The Korea Housing Institute said improvements in areas such as Ulsan and Daejeon, where sale prices have recently been rising, drove the overall index higher. However, it cautioned that weak demand and a persistent backlog of unsold units in regional housing markets make it difficult to interpret gains in some areas as a broader recovery outside Greater Seoul. Every non-Greater Seoul region except Ulsan and Gwangju still has an index below the 100.0 baseline.

The nationwide housing business outlook index rose 6.5 points from the previous month to 86.4. The financing index for the month climbed 5.4 points to 80.8, while the materials supply index gained 6.4 points to 95.1.

Meanwhile, Seoul apartment sale prices have risen for 88 consecutive weeks, and expectations for move-ins to new apartment buildings are running high. According to the Korea Housing Institute's release on Oct. 15, the Greater Seoul apartment move-in outlook index for October also surged 17.2 points to 98.2 from 81.0.

Within the Greater Seoul area, all regions posted sharp gains — Seoul rose 17.7 points to 108.3 from 90.6, Incheon climbed 23.9 points to 89.2 from 65.3, and Gyeonggi Province advanced 10.2 points to 97.2 from 87.0. Seoul's index had slipped from 100 in August to 90.6 in September before rebounding to 108.3 in October.