Uptrend Stops After 3 Years... Expectations Grow for Entering a Downturn Phase Amid Interest Rate Hikes
[Asia Economy Reporter Kim Min-young] The nationwide housing sale prices, which had sharply risen over the past three years, have stopped their upward trend. The sale price outlook index, an indicator used to gauge future housing price trends, also showed its lowest level since 2013. Analysts suggest that with the Bank of Korea's clear stance on interest rate hikes, housing prices may have officially entered a downward phase.
According to KB Real Estate's July price trend survey on the 26th, the sale prices of nationwide housing, including apartments, row houses, multi-family houses, and detached houses, remained flat at 0% compared to the previous month, marking the end of the upward trend for the first time in three years since July 2019 (-0.01%). In the metropolitan area, Gyeonggi (-0.04%) and Incheon (-0.11%) led the decline, resulting in a 0.01% drop in housing prices, the first decrease in three years and three months. Housing prices in the five major metropolitan cities also fell by 0.08%, returning to a downward trend for the first time in two years and eleven months.
Seoul apartments rose by only 0.03% compared to the previous month, significantly reducing the growth rate from last month's 0.13%. Row houses and detached houses each increased by 0.11%, resulting in an overall housing price increase of 0.07% in Seoul.
As the trend of transaction freezes → accumulation of listings → price declines solidified, buyer sentiment further contracted. This month, KB Real Estate's nationwide sale price outlook index dropped by 7.2 points from the previous month to 74.3, the lowest since the related statistics began in April 2013. This index is calculated based on surveys of sample licensed real estate agents. With 100 as the baseline, a higher score indicates more optimistic price increase expectations, while a lower score indicates more expectations of price declines. The Seoul sale price outlook index was also recorded at 67.2, lower than the national average, showing an all-time low. It fell sharply from 78 last month, deepening the expectation that 'sale prices will decline.'
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