Seoul Housing Purchase Sentiment Falls for the First Time in 6 Months... Buying Momentum Slows Down

Announcement of Real Estate Market Consumer Sentiment Survey by Korea Research Institute for Human Settlements

Apartment complexes in Songpa and Gangnam areas as seen from the 'Seoul Sky' observatory at Lotte World Tower, Jamsil, Songpa-gu, Seoul [Image source=Yonhap News]

Real estate buying sentiment in Seoul and the greater metropolitan area has weakened. Although the majority still expect housing prices to rise, the willingness to purchase homes has somewhat declined due to fatigue from recent rapid price increases and the government's tightening of loan regulations.

According to the September real estate market consumer sentiment survey results released on the 18th by the Real Estate Market Research Center of the Korea Research Institute for Human Settlements, Seoul's sales market sentiment index last month was 142.8, down 6.1 points from 148.9 in the previous month.

The consumer sentiment index is calculated through surveys conducted on 6,680 households and 2,338 brokerage offices across 152 cities, counties, and districts nationwide. It is expressed on a scale from 0 to 200, where an index below 95 indicates a declining phase, 95 to less than 115 indicates a stable phase, and 115 or above indicates a rising phase.

Seoul's sales market sentiment index had been rising for five consecutive months since turning upward at 129.8 in April, but this time it slightly declined for the first time in six months.

During the same period, Gyeonggi Province's index fell 5.0 points from 146.8 to 141.8, and Incheon dropped 7.5 points from 153.9 to 146.4. Consequently, the overall housing sales market sentiment index for the metropolitan area in September recorded 142.7, down 5.7 points from 148.4 in the previous month.

A representative from the Korea Research Institute for Human Settlements explained, "In Seoul, fatigue from the steep rise in housing prices has been reflected, and issues such as interest rate hikes and household debt management also seem to have had an impact."

On the other hand, in provincial areas, the index rose 1.6 points from 134.2 in August to 135.8 in September.

Consumer sentiment in the nationwide housing jeonse (long-term lease) market showed a similar pattern to sales. In the metropolitan area, it fell from 121.9 to 120.9. Incheon saw a slight increase (121.1→121.8), but Seoul (122.9→121.4) and Gyeonggi (121.6→120.5) declined.