Housing Regulation Easing Ignites Spark... Seoul Metropolitan Area Home Sales Sentiment Turns Upward After 5 Months

KRIHS April Real Estate Market Consumer Sentiment Survey
Capital Region 113.5→117.0...Nationwide 113.1→116.0

Photo by Asia Economy

With expectations of deregulation in housing and loans following the inauguration of the new government, housing sales sentiment has revived nationwide, including in the metropolitan area. In particular, Seoul recorded an increase for three consecutive months, marking a transition into a full-fledged upward phase.

According to the 'April 2022 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 sales market consumer sentiment index last month was 116.0, up 2.9 points (p) from 113.1 in the previous month. This marks the third consecutive monthly increase this year and a shift from a 'stable' to an 'upward' phase based on the Korea Research Institute for Human Settlements index.

The Korea Research Institute for Human Settlements classifies the real estate market situation into three phases using the consumer sentiment index: upward (115 or above), stable (95 to less than 115), and downward (below 95). The nationwide real estate sales sentiment entering the upward phase is the first time in five months since November last year (119.5).

The consumer sentiment index for the metropolitan area's sales market also rose by 3.5p from 113.5 to 117.0. It shifted from a stable phase to an upward phase for the first time in five months since November last year (118.8). The metropolitan area also recorded three consecutive months of increase. Especially in Seoul, the index reached 123.7, up 8.2p from 113.5 in the previous month, marking the highest level since October last year (128.7).

National Housing Market Consumer Sentiment Index

Gyeonggi-do rose from 113.1 in March to 115.5 in April, while Incheon’s index fell from 110.2 to 105.7 during the same period. The decline in Incheon appears to reflect the recent active housing supply in the area.

The index in provincial areas also increased from 112.5 to 114.5. Chungnam (114.9→121.9) shifted from a stable to an upward phase, while Gwangju (120.6→123.1) and Gyeongnam (116.3→117.8) continued their upward phases, rising compared to the previous month.

Daejeon (109.5→114.9), Jeonnam (105.5→114.6), Busan (110.9→114.2), Gangwon (108.5→113.3), Ulsan (104.0→110.6), Gyeongbuk (108.9→109.2), and Sejong (104.7→105.3) also rose compared to the previous month.

On the other hand, Daegu (100.7→97.4), Chungbuk (122.2→118.3), Jeju (128.2→124.0), and Jeonbuk (125.3→125.0) declined.

Sentiment in the jeonse (long-term lease) market is also recovering, centered on the metropolitan area.

The Seoul jeonse market consumer sentiment index rose 5.1p from 98.9 in March to 104.0 in April. The jeonse index, which was 96.2 in December last year and January this year, increased consecutively for three months: 97.0 in February, 98.9 in March, and 104.0 in April.

Gyeonggi-do recorded declines for four consecutive months from August to December last year (121.6→120.5→110.8→104.3→97.7), but has risen for four consecutive months this year: 97.8 in January, 99.1 in February, 102.5 in March, and 105.2 in April. Incheon rose from 101.3 in February and March to 103.8 in April.

For the entire metropolitan area, the index rose from 101.2 to 104.7, and nationwide it increased from 101.4 to 103.5, both remaining in the stable phase.