Expectations Rise for Seoul Housing Market Improvement... "May Be a Temporary Phenomenon Ahead of the Pre-sale Price Control System"

Seoul and Capital Area Pre-Sale Project Expectations Drive Forecast to 90-100 Range
Pre-Sale Volume Expected to Increase in June-July Due to COVID-19 and Regulations Impact

June Housing Sales Sentiment Index (HSSI) Forecast

[Asia Economy Reporter Onyu Lim] Despite concerns over the resurgence of the novel coronavirus infection (COVID-19), expectations are growing that the housing sales market will improve, especially in Seoul and the metropolitan area. However, the possibility of this being a temporary improvement ahead of the implementation of the private land price ceiling system at the end of July cannot be ruled out.

According to the Korea Housing Industry Association on the 11th, the nationwide Housing Sales Sentiment Index (HSSI) forecast for June was 79.6, an increase of 3.1 points from the previous month.

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

By region, the HSSI forecast for Seoul (109.5) rose 17.9 points from May, surpassing the baseline. Incheon (91.1) and Gyeonggi (90.9) also showed favorable outlooks in the 90 range. Metropolitan cities in other provinces remained stable in the 70-80 range, and other provinces stayed in the 50-70 range without significant changes. However, Jeju (50.0) dropped 16.6 points, recording the lowest nationwide.

The Korea Housing Industry Association explained, "Overall, the level from the previous month was maintained, with an increased perception that sales conditions in the metropolitan area will improve. This is due to the introduction of measures such as cyber marketing that allow sales projects to proceed within COVID-19 prevention systems, and the anticipation of the upcoming implementation of the private land price ceiling system, which has concentrated expectations."

However, they added, "The concentration of expectations on the metropolitan market may be a temporary phenomenon before the regulation takes effect, and since uncertainties due to COVID-19 still exist, it is necessary to prepare strategies accordingly."

Meanwhile, the forecast for sales volume this month (115.4) rose 19.1 points from the previous month, marking a sharp increase for two consecutive months following a 22.9-point rise last month. The forecast exceeded the baseline (100.0) for the first time in nine months since September last year, as the volume delayed by COVID-19 is added to the expected increase in sales before the implementation of the private land price ceiling system and the strengthening of resale restrictions in metropolitan cities.

On the other hand, the forecast for unsold units this month (83.3) fell 7.1 points from the previous month. The total volume of unsold units continues to decline, indicating that the burden of unsold inventory is expected to be minimal.

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