Housing Purchase Sentiment Hits Lowest This Year... Apartment Price Decline Doubles

Korea Research Institute June Survey
Nationwide 109.4→103.0
Seoul 112.9→103.4

Housing Market Consumer Sentiment Index

Concerns over a contraction in the real estate market due to interest rate hikes and economic recession are spreading, with housing sales sentiment significantly weakening nationwide, including in the Seoul metropolitan area.

According to the 'June 2022 Real Estate Market Consumer Sentiment Survey' recently released by the Real Estate Market Research Center of the Korea Research Institute for Human Settlements on the 16th, the nationwide housing sales market consumer sentiment index last month was 103.0, down 6.4 points (p) from 109.4 in the previous month, maintaining a stable phase similar to the previous month. This is the lowest level this year (January: 105.8).

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

Nationwide real estate sales sentiment remained stable from December last year to March this year, then briefly entered a rising phase at 116.0 in April due to increased expectations of real estate regulation easing after the presidential election, but returned to a stable phase in May and June.

The consumer sentiment index for the Seoul metropolitan area sales market also stayed in a stable phase for two consecutive months, dropping 7.9p from 108.9 to 101.0. Within the metropolitan area, Seoul fell from 112.9 to 103.4 by 9.5p, and Gyeonggi dropped from 108.1 to 100.9 by 7.2p, both showing stability.

Since the second half of last year, the housing sales market has been in a severe transaction freeze due to high-intensity loan regulations and pressure from base interest rate hikes. Signs of a full-scale decline in housing prices are also emerging.

According to a survey by the Korea Real Estate Board, the comprehensive nationwide housing sales price index (including apartments, row houses, and detached houses) fell by 0.01% in June compared to the previous month. This marks the first monthly nationwide price decline in 2 years and 10 months since August 2019 (-0.05%).

In particular, by housing type, nationwide apartment prices dropped 0.10% last month, doubling the decline from the previous month (-0.05%). This is also the highest monthly decline rate this year.

During the first half of this year (January to June), nationwide apartment prices fell by 0.16%, with the Seoul metropolitan area (Seoul, Gyeonggi, Incheon) experiencing a relatively larger decline of 0.47%.

In Seoul, apartment prices fell by 0.08% last month, matching the decline rate seen in February. Over the past six months this year, Seoul apartment prices have dropped by 0.25%.

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