An official at a real estate agency in Seoul watches a government briefing on the housing rapid-supply plan and comprehensive financial measures for real estate market stabilization on Thursday. [Yonhap]
An official at a real estate agency in Seoul watches a government briefing on the housing rapid-supply plan and comprehensive financial measures for real estate market stabilization on Thursday. [Yonhap]

As the government rolled out its third real estate supply package, securities analysts said the measures are likely to lift construction stocks before they have any meaningful effect on housing prices.

Mid-tier construction companies — which stand to benefit from expanded public housing participation and financial support — and cement makers, which would directly gain from a recovery in ground-breaking volume, are seen as the biggest winners within the sector.

In an industry note published Friday, Shin Dong-hyun, a researcher at Hyundai Motor Securities, said the government's "8·13 real estate supply package" would have a greater impact on construction stocks than on housing prices. "I believe the supply measures will have limited immediate effect on housing prices," he said.

He cited the need for partial legislative amendments to shorten the ground-breaking process, and noted that the final volume of units delivered is inherently volatile given the nature of real estate policy. He also noted that what truly moves prices is not ground-breaking but move-in, and that additional time is required before units reach that stage.

The impact on construction share prices, however, is expected to materialize more quickly. Hyundai Motor Securities said greater participation by private construction companies would be visible sooner, and that total order volume for builders would grow as overall supply expands. "The positive effects of this package are expected to be confirmed in the stock market within a short period," it said.

Factors that could attract private builders to public projects also drew attention. Public housing construction projects have long been seen as unattractive investments because conservative contract terms forced builders to absorb rising construction costs. Since 2025, however, the number of approved escalation clauses — provisions that pass on inflation-driven cost increases — in private-participation projects with the Korea Land and Housing Corp. has been growing, creating conditions in which builders can expect normal profit margins.

Mid-tier builders in particular are expected to benefit most from public housing projects, as they can serve as lead contractors on small- and medium-scale projects and as non-lead participants on large ones. Hyundai Motor Securities maintained an overweight rating on the construction sector.

Shinhan Investment also viewed the package as a positive signal for the construction sector and kept its overweight rating.

Kim Seon-mi, a senior researcher at Shinhan Investment, said the government's strong commitment to expanding ground-breaking activity was positive for the sector. She added, however, that the degree of benefit would vary by segment, and that with business opportunities within the sector now diversified across nuclear power plants, LNG, AI data centers and mega-projects, investors should focus on the direction of the industry's recovery rather than the size of any individual benefit.

Shinhan Investment said the supply expansion plan would benefit the construction sector in four ways: an increase in overall construction volume, accelerated ground-breaking with financial incentives offered for early starts, faster progress on urban redevelopment projects, and improved project viability for housing by easing the financing burden on project developers.

However, the measures were seen as falling short of addressing the root causes of rising housing prices and shrinking private supply — namely, instability in the jeonse and monthly rent market driven by owner-occupancy demand regulations, and deteriorating project economics from rising construction costs.

The scale of benefit is expected to vary within the sector. Shinhan Investment forecast that building materials companies — whose fortunes are tied to ground-breaking volume — would benefit more than finishing-materials companies, and that mid-tier builders would gain more than large ones.

A rise in ground-breaking volume directly translates into higher shipments of PHC piles and cement regardless of project location or scale, meaning cement makers — which have urgently needed a shipment recovery amid cost pressures — could see a full-scale turnaround in shipments from 2027.

Finishing-materials companies, by contrast, may see more limited gains than cement makers if the share of small- and mid-sized, public and rental housing expands, given that their products tend to skew toward mid- to high-end brands.

For mid-tier builders, three factors were highlighted as positives: a high proportion of projects involving fewer than 1,000 units, a relatively larger benefit from improvements in project financing interest rates and guarantee provisions, and a high dependence on the housing segment combined with a small number of active sites — meaning any increase in volume would produce an outsized improvement in earnings.

For large builders, relocation loan support tied to urban redevelopment projects was seen as a positive, but its effect is limited to projects at the stage just before or after management and disposal plan approval. The problem of rising contributions from union members due to worsening project economics also remains unresolved.


th5@heraldcorp.com