Ongoing Impact of COVID-19... Housing Projects Also 'Cloudy' in November

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[Asia Economy Reporter Onyu Lim] The difficulties in the housing business are expected to continue in November due to the impact of the novel coronavirus infection (COVID-19).

According to the Korea Housing Industry Research Institute on the 5th, the nationwide Housing Business Survey Index (HBSI) forecast for November recorded 77.6, rising 5.4 points compared to the previous month. However, it is still hovering around the 70 level, indicating that difficulties in the private sector housing business are expected to persist.

The institute explained, "Given the ongoing economic difficulties caused by COVID-19 and the government's regulatory policy stance, along with the strengthening of public-led housing supply, it is expected to be difficult for the negative perception of the private sector housing business to improve in the near term."

However, as interest in redevelopment projects that had been stalled, such as those in New Town release areas, is increasing through public redevelopment, expectations for maintenance projects are expected to continue until the selection of pilot project sites is finalized.

By region, Seoul's November HBSI forecast was 86.0 (up 0.3 points from the previous month), maintaining the previous month's level. Although there is concentrated interest in public-led reconstruction and redevelopment projects, since project implementation has not been confirmed, expectations for project improvement are likely to remain stagnant for the time being.

Additionally, Busan (78.7), Daegu (74.2), and Daejeon (78.5) are expected to recover to the 70 level, rising 9 to 10 points compared to the previous month. Gwangju (76.9) and Ulsan (85.7) are expected to rise for the second consecutive month, increasing by 4 to 6 points from the previous month.

The institute stated, "Although a slight increase is expected in Seoul, the metropolitan area, and major provincial cities following the previous month, the prolonged hovering around the 70 to 80 range makes it difficult to expect improvement in the housing business climate. The difficulties in the housing business in local areas, especially Jeju, are expected to worsen in November."

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