July Housing Market 'Cloudy'... "Impact of COVID-19 Resurgence and Tightened Regulations"

July Housing Occupancy Survey Index (HOSI) Outlook

[Asia Economy Reporter Onyu Lim] With the resurgence of the novel coronavirus infection (COVID-19) and the introduction of the June 17 real estate measures, there is a forecast that the housing occupancy market will worsen in July.

The Korea Research Institute for Human Settlements (KRHIS) announced on the 16th that the Housing Occupancy Sentiment Index (HOSI) forecast for this month recorded 76. This is a decrease of 1.6 points from 77.6 in the previous month. HOSI is an index that comprehensively assesses the occupancy conditions of apartment complexes that are about to be occupied or currently being occupied from the supplier's perspective. A value above the baseline of 100 indicates favorable conditions, while below 100 indicates unfavorable conditions.

By region, Gyeonggi (91.6) was the only area to record a score in the 90s, while Gyeongbuk (87.5), Seoul (85.4), Busan (84.0), Incheon (83.3), and Sejong (81.2) recorded scores in the 80s. Jeju scored 64.7, and Gangwon scored 57.1. KRHIS analyzed, "Due to the announcement of the June 17 measures and the spread of COVID-19 infections in non-metropolitan areas (such as Daejeon and Gwangju), the July forecast declined mainly in Seoul, Daejeon, Daegu, and Gwangju."

This month, a total of 41,154 households across 56 complexes nationwide are expected to move in, an increase of 14,353 households compared to the previous month (26,801 households). Of these, 31,429 households (76.4%) are private, and 9,725 households (23.6%) are public.

Park Hong-cheol, a senior researcher at KRHIS, said, "Concerns about the prolonged and resurging COVID-19 pandemic persist, and with the announcement of the July 10 measures following the June 17 measures, it may temporarily become difficult to sell existing homes. Since occupancy this month is expected to be concentrated in Seoul, Gyeonggi, Busan, Gyeongnam, Daegu, and Gyeongbuk, housing developers in these areas need to be cautious."

Meanwhile, the HOSI actual value for last month was 86.6, an increase of 13.8 points from 72.8 in the previous month. KRHIS pointed out, "Although the upward trend has been maintained for three consecutive months, it still falls below the baseline (100), making optimistic forecasts difficult."

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