This Year, Major Construction Companies to Supply 92,000 Housing Units... 44% Increase from Last Year
[Asia Economy Reporter Park Jihwan] This year, the apartment pre-sale volume of five major construction companies?Hyundai Engineering & Construction, Daewoo Engineering & Construction, GS Engineering & Construction, Daelim Industrial, and HDC Hyundai Development Company?is expected to increase by 44% compared to last year, reaching 92,000 units.
On the 11th, Lee Kwangsoo, a researcher at Mirae Asset Daewoo, stated, "The apartment pre-sale plan volume of the five major construction companies this year is 122,000 units, which is a 92% increase compared to the actual pre-sale volume last year," and analyzed, "Applying the past average ratio of planned to actual pre-sale volume of 75%, it amounts to about 92,000 units."
He added, "There were significant concerns about housing business performance due to the decline in apartment pre-sales since 2018," but "in 2020, major construction companies are expected to improve housing business performance due to increased pre-sale volume." Accordingly, the market share of the five major construction companies based on this year's plan is expected to reach 35%, marking an all-time high.
The researcher said, "With market changes centered on redevelopment projects and strengthened differentiation, the market expansion of major construction companies will continue," and "If market expansion continues, stable profit generation through the housing business may be possible despite the overall contraction of the pre-sale market."
It is analyzed that the risk to the housing business can rapidly decrease as the initial pre-sale rate has recently improved, especially in the metropolitan area. The initial pre-sale rate of apartments in Gyeonggi Province in the third quarter of last year was 89.2%, continuously rising since the first quarter.
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Lee said, "The general pre-sale volume of apartments in Seoul is expected to be 20,000 units, which is more than 5,000 units compared to the previous year and the largest volume since 2003," and "The general pre-sale volume in Gyeonggi Province is expected to increase by more than 9,816 units to 68,000 units, which may stabilize real estate demand sentiment due to the increase in pre-sales."
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