High Interest Rates and Peak Price Concerns Weaken Market... Housing Sales and Jeonse Sentiment Turn Down After 4 Months

KRIHS 'May Real Estate Market Consumer Sentiment Survey'

Housing Market Consumer Sentiment Index (Nationwide · Metropolitan Area) ＜Source: Korea Research Institute for Human Settlements＞

National housing sales and jeonse sentiment turned downward for the first time in four months.

According to the "May Real Estate Market Consumer Sentiment Survey" released on the 15th by the Real Estate Market Research Center of the Korea Research Institute for Human Settlements, the nationwide housing sales market consumer sentiment index last month was 109.4, down 6.6 points (p) from the previous month (116.0). The national housing sales sentiment index had been rising for three consecutive months until April this year but turned downward last month.

The Korea Research Institute for Human Settlements classifies the real estate market situation into three phases using the consumer sentiment index: rising (115 or above), stable (95 to less than 115), and declining (below 95).

Due to interest rate hikes and theories of peak housing prices, a wait-and-see attitude has deepened, and the market is steadily accumulating listings.

Seoul's housing sales sentiment index was 112.9 last month, down 10.8p from the previous month (123.7), halting the three-month consecutive rising phase and entering a stable phase.

Nowon-gu, where apartment prices rose the most in Seoul during the five years of the Moon Jae-in administration, has shown a sharp decline around the launch of the Yoon Suk-yeol administration. According to KB Kookmin Bank's monthly time series statistics on housing price trends, apartment prices in Nowon-gu fell for five consecutive weeks starting from the 9th of last month (survey date) (-0.05% → -0.04% → -0.03% → -0.01% → -0.04%). Nowon-gu is the only district in Seoul to experience a five-week consecutive decline according to KB prices.

Gyeonggi (115.6 → 108.1) and Incheon (105.7 → 101.7) also saw their indices fall, causing the entire metropolitan area index to drop from 117.0 to 108.9.

Accordingly, the indices for Seoul, Gyeonggi, and Incheon all shifted from a rising phase in March and April to a stable phase last month.

The provinces also saw a decline from 114.5 in April to 109.5 in May, ending a three-month continuous rise.

Sejong (105.3 → 87.6), Daejeon (114.9 → 100.8), and Chungnam (121.9 → 108.8) experienced significant drops of 17.7p, 14.1p, and 13.1p respectively.

Sentiment in the housing jeonse market also showed a pattern of growing expectations for three consecutive months before changing last month. The nationwide housing jeonse market consumer sentiment index last month was 100.5, down 3.0p from the previous month (103.5).

During the same period, indices in both the metropolitan area (104.7 → 101.5) and provinces (102.2 → 99.3) turned downward. Nationwide housing jeonse market consumer sentiment has remained stable for eight months since October last year (111.7).

This content was produced with the assistance of AI translation services.