National Housing Sales Sentiment Hits Lowest Since 2011 Survey

[Image source=Yonhap News]

[Asia Economy Reporter Kim Min-young] Nationwide housing transaction sentiment has contracted the most since the survey began in 2011.

According to the 'August 2022 Real Estate Market Consumer Sentiment Survey' released by the Korea Research Institute for Human Settlements' Real Estate Market Research Center, the nationwide housing market consumer sentiment index last month was 89.9, down 5.3 points from 95.2 the previous month. This marks the fourth consecutive month of decline and is the lowest figure since the institute began compiling related statistics in March 2011.

The real estate consumer sentiment index is calculated by conducting surveys targeting brokerage offices and general households, quantifying the real estate market situation into a score ranging from 0 to 200. Scores below 95 indicate a downturn phase, 95 to 114 indicate a stable phase, and 115 or above indicate an upturn phase.

The consumer sentiment index for the metropolitan area housing market also fell for the second consecutive month, dropping 5.1 points from 92.7 last month to 87.6. In particular, Seoul decreased by 6.6 points from 94.1 to 87.5, and Gyeonggi dropped by 4.4 points from 92.4 to 88.0, both maintaining a downward phase for two consecutive months. The indices for Seoul, Gyeonggi, and the metropolitan area last month were all the lowest since the institute began its survey.

Incheon also declined by 4.8 points from 90.5 to 85.7, remaining in a downward phase for three consecutive months. In Incheon's case, the housing market consumer sentiment index fell to its lowest level in 11 years and 2 months since June 2011 (73.7).

The consumer sentiment index in provincial areas also dropped from 97.3 to 92.5, shifting from a stable phase last month to a downturn phase. Notably, Sejong's index fell by 13.1 points from 81.3 to 68.2, marking the lowest index nationwide.

Additionally, a survey of brokerage offices regarding housing sales and purchase trends showed that 71% of respondents in the metropolitan area answered that "there were many people wanting to sell," while only 3.8% said "there were many people wanting to buy."

The jeonse (long-term lease) market consumer sentiment index also declined. Seoul's jeonse market consumer sentiment index was 87.5 last month, indicating a downward phase for two consecutive months. Gyeonggi Province and Incheon also remained in a downturn phase with indices of 87.1 each.