Real Estate Regulations and COVID-19... "Housing Business Challenges Continue in February"

Housing Industry Research Institute's Housing Business Survey Index (HSBI) Forecast Records 81.9

[Asia Economy Reporter Onyu Lim] Following the strong regulations after the December 16 real estate measures, difficulties in the nationwide housing business environment are expected to continue in February.

The Korea Housing Industry Research Institute announced that the nationwide Housing Business Survey Index (HSBI) forecast for February recorded 81.9. The institute analyzed, "Although it slightly rose by 6.2 points compared to the previous month, this is considered a result of the January base effect, and with housing industry outlooks declining in Seoul, Daegu, Gwangju, etc., difficulties are expected to increase."

The HSBI forecast for Seoul is 70.5, maintaining the 70 level, indicating growing difficulties. Ongoing regulations related to redevelopment projects, the private land price ceiling system, and the overlap with the off-season are intensifying negative impacts.

In particular, there are concerns about housing supply contraction due to the recent novel coronavirus infection situation. The institute stated, "Looking at past SARS and MERS incidents, short-term impacts are not expected to be significant," but also expressed concern that "if the situation prolongs, it could act in combination with government regulations, leading to a contraction in housing purchase and transaction sentiment."

By region, HSBI showed a significant decline in Busan (96.5) and Daegu (81.8) compared to the previous month, indicating reduced business expectations. Gwangju (81.4), Daejeon (81.4), and Ulsan (84.2) also remained in the 80 range, expanding negative outlooks. Daegu (81.8) dropped sharply by more than 10 points compared to the previous month, breaking below the 90 level for the first time in three months. The institute analyzed, "The recent designation of Seo-gu as an unsold housing management area and the emergence of unsold housing issues have reduced business expectations."

Gwangju (81.4) maintained the previous month's level, and Daejeon (81.4) and Ulsan (84.2) also remained in the 80 range. Busan (96.5) still recorded the highest nationwide value but fell sharply by more than 10 points compared to the previous month, breaking below the 100 level for the first time in three months.

This content was produced with the assistance of AI translation services.