Housing Market Gradually Recovering in June... "Need for Mid- to Long-Term Crisis Management Measures"

[Asia Economy Reporter Lim On-yu] The housing business market, which worsened due to the novel coronavirus infection (COVID-19), is gradually emerging from the crisis phase.

According to the Korea Housing Industry Research Institute on the 9th, the nationwide Housing Business Survey Index (HBSI) forecast for June is estimated at 86.5. This is an increase of 25.8 points compared to last month.

The HBSI is an indicator that comprehensively assesses the housing business market from the supplier's perspective, based on a survey of about 500 member companies belonging to the Korea Housing Association and the Korea Housing Builders Association. If this forecast exceeds the baseline of 100, it means that more construction companies responded that the market will improve than those who said it would not; if it falls below 100, it means the opposite.

Previously, due to the February 20 real estate regulation measures and the spread of COVID-19, the HBSI forecast recorded historic lows by dropping 30.9 points and 8.9 points in March and April, respectively.

However, following a rebound of 18.6 points last month, it rose sharply again this month. By region, Seoul's HBSI forecast (106.2) increased by 25.5 points compared to last month. Additionally, Daegu (91.1) and Ulsan (90.0) recovered to the 90-point level, while Gwangju (89.2), Daejeon (88.8), and Busan (81.8) recovered or maintained the 80-point level, significantly improving negative perceptions of business conditions.

This month’s redevelopment and reconstruction order forecasts also rose sharply to 91.7 and 93.2, respectively, up 12.0 points and 9.9 points from May.

The Korea Housing Industry Research Institute stated, "This is a base effect from the very low performance due to the impact of COVID-19," and added, "Since the end of COVID-19 will take a long time and the resulting economic difficulties are expected to be prolonged, business operators need to prepare mid- to long-term crisis management measures covering the entire housing business."