Aegis Asset Management "Concerns Over Domestic Real Estate Market Slump Due to COVID-19 Impact"

[Asia Economy Reporter Park Jihwan] Concerns have been raised that the domestic real estate market may stagnate this year due to the impact of the novel coronavirus infection (COVID-19). In particular, retail and hotel markets are expected to underperform, and zero-energy buildings are projected to be preferred in the future.

Aegis Asset Management Research Center released a report on the 24th regarding 'The Impact of COVID-19 on the Domestic Real Estate Market.'

The report analyzed the spread trend of 'COVID-19' and concluded that it shows a pattern similar to the 2009 'H1N1 influenza.' The H1N1 influenza started in Mexico in April 2009 and caused over 6 million infections and nearly 20,000 deaths worldwide, resulting in a fatality rate of 0.3%.

The George Washington University Public Health Center and the Centers for Disease Control and Prevention in the United States argue that the actual number of deaths was higher. Considering this, the fatality rate rises to between 3.0% and 4.2%. This is slightly lower than the current COVID-19 fatality rate of 4.4%.

The report also analyzes that there is a similarity in that both H1N1 influenza and coronavirus are pandemic infectious diseases and are linked with other factors posing risks of economic recession. H1N1 occurred after the 2008 financial crisis, and COVID-19 could lead to a global economic downturn due to the decline in oil prices caused by reduced demand, affecting the U.S. shale industry and oil-producing countries.

The real estate market is also expected to experience an overall downturn this year. In particular, retail and hotel markets are likely to suffer significant sales impacts. The office market is not expected to face a major slump, but shared office spaces may see a partial decrease in tenant demand, while the logistics market is expected to remain continuously favored.

The report forecasts that due to COVID-19, automation systems to reduce industrial damage, telecommuting such as video conferencing and online lectures, the establishment of data infrastructure, autonomous commuting systems, and self-driving cars to reduce infections in public transportation may spread.

Regarding the hotel market, it was analyzed that there are opportunities through active investment and marketing because hotels have an advantage over shared accommodation facilities in terms of hygiene and comfort.

Aegis Asset Management Research Center officials emphasized, "The real estate market is expected to face major issues related to health and environmental problems, similar to fine dust in the past," adding, "Real estate that provides tenants with a more comfortable environment will be preferred."

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