Jusanyeon, "Nationwide Housing Market Boom Expected"... Anticipates Recovery to 2015 Levels

[Asia Economy Reporter Ryu Tae-min] The housing business sentiment index (HBSI) forecast for June has risen significantly due to the government's strengthened supply policies and Seoul City's support policies for redevelopment projects.

On the 10th, the Korea Housing Industry Research Institute announced that the nationwide HBSI forecast for June rose by 11.8 points from the previous month to 113.0. The HBSI is an indicator that forecasts the housing business market by surveying 500 member companies of the Korea Housing Association and the Korea Housing Builders Association every month. A figure below the baseline of 100 indicates a negative market outlook.

The institute stated, "Since last month, the HBSI has risen sharply, moving beyond the localized strength centered around Seoul and the metropolitan area," and added, "A nationwide housing business optimism is forming at a level similar to 2015, when housing permits exceeded 700,000."

By region, the forecast is expected to exceed the baseline in all areas except Daegu and Gyeongnam. Seoul's HBSI for this month is 114.2, maintaining the 110 level following last month. In Seoul, candidate site identification and pilot project promotion are underway following the government's 2·4 housing supply plan. Additionally, with Seoul City's ongoing easing of regulations on small-scale reconstruction and redevelopment projects, housing business expectations are also rising.

Local metropolitan cities also showed a prevailing forecast that the housing business market will improve. Daejeon (126.3), Ulsan (120.0), and Gwangju (116.6) increased by more than 25 points compared to the previous month, further boosting housing business optimism. Busan (108.3) and Daegu (92.5) maintained their previous month's levels.

Last month's HBSI actual figure was 97.6, down 5.9 points from the previous month. The perceived economic gap last month also recorded a lower actual figure than the forecast. The redevelopment order forecast for this month remained at 100.0, the same as the previous month. The reconstruction order forecast rose by 2.9 points from the previous month to 101.4.

A representative from the Korea Housing Industry Research Institute said, "If supply is made possible by improved housing business conditions, it will contribute to stabilizing housing prices, but currently construction companies are facing difficulties in procuring construction materials," and added, "The government and housing businesses need to monitor the progress of construction related to material supply and prepare countermeasures."