With the Peak Season for Apartment Sales Approaching... 'Temporary Closure' Due to Novel Coronavirus

Construction Companies Facing New Pre-Sales... Model House Delays and Closures
Confirmed Complexes Resort to Cyber Model Houses as a Last Resort
Public Drawings for Remaining Units Considered for Online Broadcast
Sales Gap Amid Subscription Task Transfer and COVID-19 Creates a Dilemma

[Asia Economy Reporter Lee Chun-hee] The novel coronavirus infection (Wuhan pneumonia) has spread to the apartment sales market. Some sample house openings scheduled before new sales have been canceled, and some companies have even postponed their sales schedules, causing disruptions in various projects. With the government's transfer of internet subscription tasks causing a sales gap at the beginning of the year, the overlapping novel coronavirus situation is raising concerns about a prolonged closure in the sales market.

According to the construction industry on the 4th, all five sites that started new sales from the 3rd due to the government's transfer of internet subscription tasks are experiencing disruptions in their sales plans due to the novel coronavirus situation. GS Construction postponed the opening of the sample house for 'Cheongna Hills Xi' in Daegu, originally scheduled for the 7th, by two weeks. The company initially planned to install thermal imaging cameras and provide hygiene products such as masks and hand sanitizers at the sample house but ultimately decided to delay the project.

Projects confirmed for sales next week are also under pressure. Daewoo Construction and SK Construction canceled the opening of the sample house for 'Maegyo Station Prugio SK View' in Suwon, Gyeonggi Province, originally planned for the 14th, and decided to provide related information through a cyber sample house on their websites. Since the announcement of the resident recruitment is scheduled for the 7th and delaying sales is not an option, this was a last-resort measure.

Both companies have nearly completed the physical sample house construction. A Daewoo Construction official said, "The physical sample house will be used for contract signing with winners." Daewoo Construction plans to extend the document submission schedule and designated contract dates for winners and stagger visiting dates and times by building to disperse visitors as much as possible.

Hyundai Construction's 'Hillstate Songdo,' which was also scheduled to open its sample house on the same day, is considering postponing the schedule. A company official said, "We are currently coordinating various options, including schedule delays." Seoul Housing and Communities Corporation (SH Corporation), which planned to operate the sample house for the 9th complex in Magok District, Seoul, from the 15th to the 17th for three days, is also considering replacing it with a cyber sample house.

Currently, even complexes that are in the middle of apartment sales are facing difficulties. Most subscription schedules, including viewing sample units before subscription, contract signing with winners, and additional sales for uncontracted units, take place at the sample house. 'Hillstate Prugio Suwon,' which had general sales in December last year, has temporarily closed its sample house. Hyundai Construction was scheduled to hold a public lottery for 42 uncontracted units at the sample house on the 5th but is looking for alternatives. The company stated, "We are also considering broadcasting the public lottery process online."

The concern is that if the novel coronavirus situation prolongs, the spring sales market, known as the peak season, may shrink. An industry insider said, "If the sales schedule of a specific project is delayed, the prepared projects may be postponed sequentially," adding, "It cannot be ruled out that the overall housing supply may also be disrupted."

According to industry and information providers, 19,134 apartment units are scheduled for sale at 26 locations nationwide in February alone. This is nearly double the 9,938 units during the same period last year. The general sales volume also reaches 15,465 units. This is due to many projects delayed by the government's transfer of subscription tasks. In March, the sales volume increases further to 34,956 units. Especially when combined with April's sales, the total volume over three months reaches 81,592 units. This is about twice the 47,739 units during the same period last year. If the novel coronavirus situation prolongs, a significant portion of these projects will inevitably be affected.

The newly introduced internet subscription system 'My Home' by the Korea Appraisal Board is also a source of concern. There are worries that if connection delays and errors that appeared immediately after the site opened on the 3rd recur during the actual internet subscription process, considerable aftereffects may occur. This is because subscription applicants, unable to check physical sample houses, may flock to the system to check related information, potentially causing an explosive increase in site visitors.

Companies are in a dilemma. They need to hurry projects as the grace period for the private land price ceiling system ends at the end of April, but unexpected variables combined with a one-month subscription gap are expected to disrupt these plans.