Impact of the June 17 Measures... July Nationwide Housing Market Forecast 'Cloudy'

[Asia Economy Reporter Onyu Lim] Due to the impact of the June 17 real estate measures, the nationwide housing sales market is expected to be sluggish in July. On the 14th, the Korea Housing Institute announced that the Housing Sales Sentiment Index (HSSI) forecast for July recorded 69.1, a decrease of 10.5 points compared to the previous month.

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

The Korea Housing Institute stated, "Despite being just before the implementation of the price ceiling system and strengthened resale restrictions, the July forecast declined nationwide," adding, "This is analyzed as reflecting the perception that business conditions will significantly deteriorate due to strengthened demand regulations following the June 17 real estate measures." The government expanded regulated areas to Gyeonggi, Incheon, Daejeon, Cheongju, and others through the June 17 measures and strengthened regulations on jeonse loans, disposal, and move-in obligations within these regulated areas.

Looking at the regions, Seoul (79.2), Gyeonggi (78.9), and Incheon (79.2) all sharply declined, recording levels in the 70s. Metropolitan cities and other provinces also generally saw a decline in forecasts, with all regions except Gwangju (80.0) remaining in the 50 to 70 range.

As economic uncertainty due to the novel coronavirus disease (COVID-19) is expected to prolong, market volatility has increased amid strengthened real estate regulations. The Korea Housing Institute advised, "Housing businesses need to establish contingency plans within their companies to respond to market volatility and strengthen their ability to cope with short-term fluctuations," adding, "Not only housing businesses but also households hoping to purchase homes need to closely monitor market conditions."

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