Domestic Move-in Market Worsened by COVID-19 Remains Stagnant in May

원본보기 아이콘

[Asia Economy Reporter Onyu Lim] The domestic move-in market, worsened by the impact of the novel coronavirus infection (COVID-19), shows no signs of improvement.

According to the Korea Housing Industry Research Institute on the 14th, the May Housing Occupancy Sentiment Index (HOSI) forecast was 66.2, rising by only 1.3 points compared to the previous month.

HOSI is an indicator that comprehensively assesses the move-in conditions of apartment complexes that are about to be occupied or are currently being occupied from the supplier's perspective. A value above the baseline of 100 indicates favorable conditions, while below 100 indicates unfavorable conditions.

The HOSI forecast has hovered around the 60 level since February, when the spread of COVID-19 began domestically.

Although the actual HOSI value for last month, which recorded the lowest since the survey began (54.2), rebounded to 62.7, it still remains around the 60 level.

Last month, the nationwide occupancy rate was 79.3%, rising from the previous month and halting the decline for the first time in five months since November last year.

The reasons for non-occupancy were surveyed as 'lack of tenant acquisition' (36.9%), 'delay in selling existing homes' (33.8%), and 'failure to secure balance loans' (16.9%), in that order.

The Korea Housing Industry Research Institute stated, "With the recent stabilization due to COVID-19 quarantine effects, some regions have seen a temporary slight increase in HOSI forecasts, actual values, and occupancy rates," but also diagnosed that "the overall move-in market has not recovered to the situation before the COVID-19 outbreak."

As concerns over the prolonged COVID-19 pandemic persist, polarization by region and complex and deterioration of move-in conditions are expected to continue for the time being. This month, a total of 18,699 households are scheduled to move in across 31 complexes nationwide. Large complexes with over 1,000 households will move in in Seoul, Gyeonggi Siheung, Jeonbuk Jeonju, Gyeongnam Tongyeong, and Gwangju.

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.