COVID-19 Shock... April Pre-Sale Index Forecast Hits All-Time Low

National HSSI Forecast at 52.2... First Time Above 50
Capital Region (63.0) Maintains Previous Month's Level
Provincial Metropolitan Areas Forecast Down 10-40 Points
Worsening Financing Conditions Due to Delays in Sale Schedules and Extended Construction Periods

Regional Housing Sale Market Index Outlook

[Asia Economy Reporter Onyu Lim] As the novel coronavirus disease (COVID-19) crisis continues, the nationwide housing pre-sale market is expected to be at its worst even in April, the peak season for spring pre-sales.

According to the Korea Housing Industry Research Institute on the 9th, the nationwide Housing Sale Sentiment Index (HSSI) forecast for April is 52.2. This is a drop of 14.5 points from the previous month and marks the first time the index has fallen to the 50-point level since the survey began.

Furthermore, last month's actual HSSI was 47.3, falling to the 40-point level for the first time since the survey started.

The HSSI is an indicator that comprehensively assesses the pre-sale conditions of apartment complexes that are about to be sold or are currently on sale from the supplier's perspective. It is surveyed monthly among housing business operators (members of the Korea Housing Association and the Korea Housing Construction Association). An HSSI above 100 indicates a positive sales outlook, while below 100 indicates the opposite.

The Korea Housing Industry Research Institute explained, "As the severe COVID-19 situation continues, delays in pre-sale schedules have occurred, and uncertainties regarding future pre-sale plans and promotional strategies have increased, strengthening the perception of a downturn in the pre-sale market."

Among this month's forecasts, the highest nationwide score (Seoul 66.6) fell significantly below the baseline at the 60-point level, with most regions showing the lowest levels between 30 and 50 points. In particular, Daegu (51.3), which had been leading the local pre-sale market, dropped 22.2 points compared to last month's forecast. Ulsan (42.1), which had been showing signs of recovery due to expectations for the local economy before the COVID-19 outbreak, saw its forecast fall by 38.8 points from the previous month.

This month's forecast for pre-sale volume (73.4) and unsold inventory (90.4) dropped by 11.3 points and 9.6 points respectively compared to the previous month.

The Korea Housing Industry Research Institute projected, "Although housing developers' perception of the pre-sale market is worsening, some complexes with competitive locations and prices will continue to see concentrated subscription demand, leading to ongoing overheating in applications. The polarization and localization of the pre-sale market will intensify further."

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