'Next Week Prices Will Likely Drop Further...' Housing Buying Sentiment Has Cooled Even More

National Housing Market Consumer Sentiment Index at 83.5
Lowest Ever Since Korea Research Institute for Human Settlements Statistics Began
National Housing Prices Fall as Much as During Financial Crisis

Photo by Asia Economy

As the nationwide decline in housing prices has reached levels comparable to the 2008 financial crisis, housing purchase sentiment has also frozen to an all-time low. There are excess listings everywhere due to a lack of buyers.

According to the "October Real Estate Market Consumer Sentiment Survey" released on the 16th by the Real Estate Market Research Center of the Korea Research Institute for Human Settlements, the nationwide housing market consumer sentiment index recorded 83.5, down 6.6 percentage points (p) from the previous month (90.1). This is the lowest figure since the Korea Research Institute for Human Settlements began compiling related statistics in March 2011.

Housing market consumer sentiment has been in a downward phase nationwide for three consecutive months since August.

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).

Last month, the index for the metropolitan area was 82.5, down 6.5p from the previous month, while the non-metropolitan area was 84.6, down 6.6p.

Seoul recorded 83.3, down 7.8p from the previous month (91.1), and Sejong recorded 67.1, down 16p from the previous month (83.1), marking the lowest nationwide.

The jeonse (long-term lease) market is also continuing its downward phase.

Nationwide, the index was 76.8, down 8.3p from the previous month, with the metropolitan area (74.1) and non-metropolitan area (79.8) falling by 8.7p and 7.8p respectively.

Seoul's housing jeonse consumer sentiment index sharply deteriorated, recording 72.4, more than 10p lower than the previous month (82.8).

The consumer sentiment index for the land market is also in a declining phase.

Last month, the nationwide index recorded 85.9, falling below the 90 mark, and especially in the metropolitan area, it dropped 8.3p from 94.5 in September to 86.2 in October, a larger decline compared to the non-metropolitan area's 3.4p drop.

Photo by Asia Economy

Meanwhile, the nationwide decline in housing prices is intensifying.

According to data released the previous day by the Korea Real Estate Board, the comprehensive housing sale price in Seoul fell by 0.81% compared to the previous month. This is the largest drop in 13 years and 10 months since December 2008 (-1.39%) during the global financial crisis.

The comprehensive housing sale prices nationwide (-0.77%) and in the metropolitan area (-1.02%) also saw larger declines compared to the previous month. This is also the largest drop since December 2008 (-0.78%, -1.17%).

The Real Estate Board explained, "Due to the rising interest rate trend and concerns over price declines, purchase sentiment is shrinking and transaction prices are being adjusted downward, resulting in an accumulation of listings caused by supply-demand imbalances between buyers and sellers."

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