Nationwide Housing Market Except Seoul in September 'Cloudy'... "Impact of COVID-19 and Typhoons"

HSSI Outlook for September 2020

[Asia Economy Reporter Im On-yu] Due to the resurgence of the novel coronavirus infection (COVID-19) and the impact of typhoons, the nationwide housing pre-sale market, excluding Seoul, is expected to contract in September.

The Korea Housing Industry Institute (KHII) announced that the Housing Sales Sentiment Index (HSSI) forecast for September recorded 60.8, a decrease of 15.8 points compared to last month. The HSSI is an index that comprehensively assesses the sales conditions of 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 Builders Association).

KHII analyzed, "With the resurgence of COVID-19 and tightened regulations to suppress demand, investment has contracted, worsening business operators' perceptions of new pre-sale projects," adding, "There are concerns about supply contraction in non-metropolitan areas with unfavorable location conditions."

By region, Seoul's HSSI forecast rose by 0.9 points from last month to 86.3, maintaining the only score above 80. Gyeonggi Province dropped 6.1 points to 70.8, and Incheon decreased by 12.8 points to 66.6. Areas outside the metropolitan area are expected to see worsening pre-sale business conditions.

The forecast dropped significantly compared to the previous month, with Daejeon at 50.0 (-37.5 points), Ulsan at 57.8 (-15.8 points), Gwangju at 62.5 (-14.4 points), Gangwon at 50.0 (-23.3 points), Jeju at 52.6 (-16.1 points), and Gyeongbuk at 57.8 (-35.5 points), remaining in the 50-60 range.

KHII stated, "Due to regulatory policies, negative perceptions of the pre-sale market persist, and only Seoul and the metropolitan area are expected to maintain a certain level of pre-sale demand."

Meanwhile, the actual HSSI figure for August was 59.1, down 11.2 points from the previous month (59.1). Seoul (86.9, up 0.7 points) and Gyeonggi (70.8, down 6.1 points) maintained last month's levels, while Sejong (72.2, down 32.5 points), Daejeon (56.5, down 31.0 points), Ulsan (47.3, down 22.7 points), and Gwangju (54.1, down 18.9 points) saw significant declines. Incheon (66.6, down 12.8 points) and Busan (53.3, down 6.0 points) also fell.

The nationwide expected pre-sale rate for September is 77.9%, down 2.1 percentage points from last month. KHII said that with the expected pre-sale rate falling into the 70% range, caution is required when launching new pre-sale projects. KHII added, "With the regulatory policy stance on the housing market, such as the price ceiling system and resale restrictions, being maintained, and COVID-19 resurging mainly in the metropolitan area, causing ongoing confusion, thorough prior inspections are necessary when proceeding with pre-sale projects."

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