April Nationwide Housing Business Sentiment Shows 'Positive Signal' for the First Time in 10 Months

National HBSI Recovers Baseline After 10 Months
Capital Region HBSI at 113.3, Seoul at 123.9
Appears Related to Deregulation Policies on Maintenance Projects
Most Provinces Also Above 80.0, Improved from Last Month

April 2022 Housing Business Survey Index (HBSI) Trends / Data provided by Korea Housing Industry Institute

[Asia Economy Reporter Hwang Seoyul] The nationwide housing business outlook in April is expected to improve for the first time in 10 months.

According to the 'April Nationwide Housing Business Survey Index (HBSI)' released on the 7th by the Korea Housing Industry Research Institute (hereinafter referred to as KHIRI), the nationwide HBSI forecast for this month is 101.2, up 35.0 points from the previous month. This marks a recovery above the baseline (100.0) for the first time in 10 months.

The HBSI is an index calculated monthly by surveying housing business operators on their business performance and outlook. It is a supply market indicator that comprehensively assesses the housing business climate from the supplier's perspective. The survey targets 500 member companies affiliated with the Korea Housing Association and the Korea Housing Construction Association. The index baseline is 100; below 85 indicates a downturn phase, 85 to less than 115 indicates a stable phase, and 115 or above indicates an upturn phase.

Specifically, the metropolitan area HBSI stood at 113.3, showing a value above the baseline. Seoul recorded 123.9, rising 40.3 points from the previous month, Gyeonggi Province was at 116.2, and Incheon recorded 100.0.

KHIRI stated, "The recent announcement of eased building regulations in Seoul, strengthened support for redevelopment projects, and the new government's pledge to normalize regulations related to redevelopment projects appear to have raised expectations for improved business conditions centered on redevelopment sites."

Most provinces also showed favorable outlooks. The provincial HBSI was 89.4, up 28.3 points from the previous month. Busan (108.3), Ulsan (100.0), Sejong (100.0), and Chungnam (100.0) recorded values above the baseline. Most other regions also showed forecasts above the 80 mark. Gwangju (82.3), Daejeon (86.6), Gangwon (90.9), Jeonbuk (92.3), Jeonnam (85.7), Gyeongbuk (87.5), and Jeju (85.7) improved significantly compared to last month. Daegu (84.6) rose 26.0 points from the previous month, recovering above the 80 mark for the first time in nine months.

Chungbuk (70.0) and Gyeongnam (78.5) remained below the 80 mark but increased by 11.7 points and 25.6 points respectively compared to last month.

However, KHIRI pointed out, "With the new government's policy direction toward deregulation and recent supply-demand instability due to rising construction raw material prices, as well as increasing unsold housing in some regions, volatility in housing business conditions is growing. Therefore, housing business operators need to prepare business strategies accordingly."