Impact of COVID-19 Resurgence... September Housing Business Outlook 'Cloudy'

September Housing Business Sentiment Index Forecast

[Asia Economy Reporter Onyu Lim] Due to the impact of the novel coronavirus infection (COVID-19), it is forecasted that the housing business conditions in September will not improve significantly.

The Korea Housing Industry Research Institute (KHIRI) announced on the 3rd that the nationwide Housing Business Survey Index (HBSI) forecast for this month recorded 66.2, an increase of 8.1 points (p) compared to last month.

The HBSI is an indicator that comprehensively assesses housing business conditions from the supplier's (construction companies') perspective, based on a survey of about 500 member companies affiliated with the Korea Housing Association and the Korea Housing Builders Association. If the forecast exceeds the baseline of 100, it means that more construction companies expect the market to improve than those who do not; if it falls below 100, it indicates the opposite.

Jae-hyung Lee, a senior researcher at KHIRI, explained, "Although the forecast has risen compared to last month, it is still hovering around the 60 level. This is because the COVID-19 situation, which had been stabilizing, has recently worsened again, and the trend of strengthening housing market regulations continues."

Major regions such as Seoul (75.0), Daejeon (76.0), Ulsan (70.0), Busan (58.8), Daegu (66.6), and Gwangju (62.9) have this month's forecast remaining between 50 and 70, indicating continued negative outlooks on the housing business conditions.

This month's redevelopment order forecast fell by 2.0 points from last month to 80.5, while the reconstruction order forecast rose by 4.5 points to 83.5.

A KHIRI official analyzed, "Although the government announced a housing supply plan through redevelopment projects in the August 4th supply measures, the business expectations of private developers have not significantly improved due to the public-centered project promotion. Despite the government's expansion plan for redevelopment projects, private sector participation is expected to remain limited."

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