South Korean builders' business confidence touched a 19-month low in August due mainly to government measures to cool the housing market, a poll showed Monday.

The construction business survey index stood at 74.2 last month, down 11.2 points from the previous month and at its lowest level since January 2016, according to the survey by the Construction and Economy Research Institute of Korea.

A reading hovering below 100 indicates that builders pessimistic about the current state of the construction industry outnumber those with optimistic views.
 

"The plunge stemmed largely from concerns that the government steps would put a damper on the housing market down the road," said Park Cheol-han, an associate research fellow at the institute. "Builder sentiment also worsened as orders tend to drop during the hot summer month of August."

Early last month, the government unveiled the measures to rein in the overheated housing market, including the designation of areas under close state scrutiny, tougher mortgage rules and heavier capital gains taxes.

Park added the government's budget plan for 2018, which was announced last week and calls for a 20 percent cut in infrastructure spending, affected their sentiment negatively.

The CBSI for large builders amounted to 64.3 last month, down 27.4 points from July and reaching a seven-year low. The number for mid-sized builders dropped 6.2 points to 76.9 with the figure for smaller firms dipping 2.1 points to 71.7.

The overall CBSI outlook for September clocked in at 80.6, up 6.4 points from last month, according to the findings. (Yonhap)