COVID-19 Spread Slows Down... Apartment Sales in Gyeonggi-do Revive

May Nationwide Housing Sales Market Index Forecast 76.5
Up 24.3 Points from Previous Month

[Asia Economy Reporter Onyu Lim] As the spread of the novel coronavirus infection (COVID-19) slows down, signs of revival in the nationwide housing pre-sale market in May are emerging.

According to the Korea Housing Industry Research Institute on the 12th, the Housing Sales Sentiment Index (HSSI) forecast for nationwide pre-sales in May was 76.5. This marks an increase of 24.3 points compared to the previous month, recovering to the 70-point level.

The HSSI is an index that comprehensively assesses the sales conditions of apartment complexes that are about to be sold or are currently on sale from the supplier's perspective. It is surveyed monthly targeting companies engaged in housing businesses (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.

Kim Deok-rye, head of the Housing Policy Research Office at the Korea Housing Industry Research Institute, analyzed, "Along with the base effect of the forecast plunging for two consecutive months, the significant slowdown in the domestic spread of COVID-19 has reflected expectations that traditional methods of resuming pre-sales will be possible."

By region, the forecast improved significantly in the metropolitan areas of Seoul (91.6, up 25.0 points), Incheon (94.2, up 32.9 points), and Gyeonggi (82.9, up 21.8 points), as well as in provincial metropolitan cities such as Daejeon (90.9, up 29.4 points), Daegu (80.0, up 28.7 points), and Sejong (89.4, up 27.5 points). Other provinces also showed a slight decrease in negative perceptions of the pre-sale market, with forecast values ranging between 50 and 70.

However, since the forecast remains below the baseline of 100, some analyses suggest that optimistic views on the pre-sale market are risky. Kim stated, "As the risk of a COVID-19 resurgence still exists and it is difficult to predict the market impact of COVID-19, continuous monitoring of market conditions is necessary."

The actual HSSI for April was 55.0, a slight increase of 7.7 points from the previous month. It is judged that pre-sale performance was very poor due to the COVID-19 emergency situation remaining at a severe level.

Meanwhile, the Korea Housing Industry Research Institute forecasted that in the post-COVID-19 era, cyber model houses, which were temporarily used as an alternative to physical model houses, will establish themselves as a promotional method. Additionally, non-face-to-face promotional methods such as video consultations and robot consultants are expected to continue developing.

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