[Asia Economy Reporter Geum Bo-ryeong] Although the government announced its nineteenth real estate policy, analysis suggests that the impact on construction companies is limited.
According to KTB Investment & Securities on the 23rd, the government announced the nineteenth real estate policy, titled "Measures to Stabilize the Housing Market by Blocking Speculative Demand," on the 20th.
The housing market stabilization measures include designating Suwon Yeongtong, Gwonseon, Jangan, Anyang Manan, and Uiwang as regulated areas, strengthening mortgage loan regulations within these regulated areas, tightening management of business loans for home purchases, and reinforcing real demand requirements for mortgage loans in these areas.
Overall, the measures were as expected. This time as well, the government focused on preventing gap investments through loan regulations and stricter residency conditions, demonstrating its commitment to stabilizing housing prices. Additional regulated areas are expected to be designated if necessary in the future.
However, the impact of this additional real estate policy on the construction industry is analyzed to be limited. Kim Sun-mi, a researcher at KTB Investment & Securities, explained, "The regulations are limited to specific regions, and the volume of orders and new sales by construction companies in those areas is minimal," adding, "Daewoo Construction's 2,600 units are included, which is about 7.5% of their annual plan."
The stock prices are also expected to be largely unaffected. Jo Yoon-ho, a researcher at DB Investment & Securities, analyzed, "Because the policy does not include supply-related measures, it is judged that the impact on construction industry stock prices will be minimal," adding, "While it will have a localized effect on the Suwon market, the overall impact of this policy on the real estate and stock markets will be limited."
As the COVID-19 pandemic prolongs, the need for economic stimulus measures has increased. Researcher Kim said, "If additional supplementary budgets, expansion of social overhead capital (SOC), or supply expansion measures such as early development of the 3rd new town and provision of rental housing near subway stations are proposed, it is expected to positively reflect on construction companies' performance and stock prices."
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