Bank of Korea Housing Price Outlook CSI Hits Record High: "House Prices Will Rise Further"

[Image source=Yonhap News]

[Asia Economy Reporter Eunbyeol Kim] As the nationwide apartment sale price continues to rise, the housing price outlook has reached an all-time high since the survey began.

According to the 'November 2020 Consumer Sentiment Survey' released by the Bank of Korea on the 24th, the housing price outlook Consumer Sentiment Index (CSI) recorded 130, rising 8 points compared to the previous month. The housing price outlook CSI is a survey of opinions on house prices one year later, with 100 as the baseline. A value above 100 indicates expectations that house prices will rise, while below 100 indicates expectations that they will fall.

The Bank of Korea has been surveying the housing price outlook CSI since January 2013. This is the highest level since the survey began. Hwang Hee-jin, head of the Statistics Survey Team at the Bank of Korea's Economic Statistics Bureau, explained the rise in the housing price outlook CSI as "due to the continued upward trend in nationwide apartment sale prices."

The housing price outlook CSI recorded 125 in July and August, then dropped to 117 in September due to the impact of real estate policies. However, it rebounded to 122 in October and jumped again to 130 this month. This means that expectations for rising house prices are spreading again.

This month's Consumer Confidence Index (CCSI) rose 6.3 points from the previous month to 97.9, continuing the upward trend from the previous month. However, the impact of social distancing measures due to the resurgence of COVID-19 has not been reflected, so further observation is needed.

Team leader Hwang explained, "The survey period was from the 10th to the 16th of this month, before the implementation of social distancing level 1.5. It seems that suppressed economic activities resumed and expectations for vaccine distribution contributed to the rise in the CCSI." He added, "Next month, the index will be affected by whether the quarantine measures against the COVID-19 resurgence succeed and whether the social distancing level is adjusted."

The CCSI has been based on the long-term average from 2003 to 2019, with 100 as the baseline. A value above 100 indicates optimism compared to the long-term average, while below 100 indicates pessimism.

The November Employment Outlook CSI (82) rose 7 points due to the resumption of economic activities, and the Current Living Conditions CSI (89) and Living Conditions Outlook CSI (94) also increased by 3 points each compared to the previous month. Price perception fell by 0.1 percentage points to 1.8% compared to the previous month, but the expected inflation rate remained at 1.8%, the same as the previous month.