February Move-in Performance Plummets Due to 2·20 Measures and COVID-19...

[Asia Economy Reporter Onyu Lim] The nationwide apartment move-in market is rapidly cooling down due to the strengthened regulations on adjustment target areas under the February 20 real estate measures and the spread of the novel coronavirus infection (COVID-19).

According to the Korea Housing Industry Research Institute (hereafter KHIRI) on the 12th, the nationwide Housing Occupancy Situation Index (HOSI) for last month was 62.6, a sharp drop of 23.2 points compared to January’s actual figure (85.8) and 21.7 points compared to the February forecast (84.3). HOSI is an index that comprehensively assesses the move-in conditions of apartment complexes that are about to move in or are currently moving in from the supplier’s perspective. The baseline is 100; a value above 100 indicates favorable move-in conditions, while below 100 indicates unfavorable conditions.

Jeonbuk’s HOSI actual figure for last month (43.7) recorded the 40-point range for the first time since the survey began in June 2017, as the start of move-ins for complexes in February coincided with the acceleration of COVID-19 spread.

The nationwide move-in rate last month was 77.6%, with reasons for non-move-in including 'delays in selling existing homes' (38.0%), 'failure to secure tenants' (31.0%), and 'failure to secure balance loans' (16.9%). In particular, the Daegu region appears to have experienced a decline in move-in rates due to increased non-move-ins and move-in delays caused by the spread of COVID-19.

The nationwide HOSI forecast was rated at 69.7. While most regions saw a decline in forecasts compared to the previous month, Seoul (76.4) fell to the 70-point range for the first time in 12 months, Daejeon (69.2) dropped to the 60-point range for the first time in 16 months, and Gwangju (56.0) fell to the 50-point range for the first time in 12 months.

KHIRI explained, "Due to the impact of the February 20 measures announcement and the spread of COVID-19, the February move-in results were lower than initially expected," adding, "Most regions, centered on the metropolitan area and some major cities, saw simultaneous declines in both February actual figures and March forecasts."

The scheduled move-in volume for March is a total of 20,661 households across 48 complexes nationwide. Large complexes with over 1,000 households are scheduled to move in at one complex each in Yangcheon-gu, Seoul; Gwangsan-gu, Gwangju; Donghae-si, Gangwon; and Busanjin-gu, Busan.

Meanwhile, a perception survey related to COVID-19 conducted by KHIRI over five days from the 24th of last month targeting 99 member companies found that most respondents believed COVID-19 would affect the housing business both in the short term (96.9%) and long term (97.9%). More than half of the respondents expected that the housing business segment most affected would be sales (short term 56.8%, long term 51.4%).

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