The market still expects housing prices to rise even after the reassignment of the land transaction permission district. This month, consumer expectations for rising housing prices soared to the highest level since November of last year. Consumer sentiment also slightly rebounded as political uncertainty eased following the ousting of former President Yoon Suk-yeol.
According to the 'April Consumer Trend Survey Results' announced by the Bank of Korea on the 23rd, this month's housing price outlook consumer trend index (CSI) was tallied at 108, an increase of 3 points (p) from the previous month. This is the highest figure since November of last year (109). The housing price outlook index has been on a downward trend for five consecutive months since October of last year (116), finally rebounding in March, and has been rising for two consecutive months.
When the housing price outlook index exceeds 100, it means that there are more consumers expecting a price drop than those expecting a rise. Lee Hae-young, head of the economic sentiment survey team at the Bank of Korea, noted, "The rise in the housing price outlook CSI seems to be due to the policy effect following the reassignment of the land transaction permission district," adding, "Although the rate of increase in apartment prices and transaction volume in Seoul has slowed, the upward trend is still continuing."
The Seoul city government excluded the three districts of Gangnam (Gangnam-gu, Seocho-gu, Songpa-gu) from the land transaction permission district in February, but included them again after just over a month as the pace of housing price increases accelerated. Since then, apartment prices have shown signs of stabilization, but consumer expectations for rising housing prices have not diminished.
The perceived economy has improved. The consumer sentiment index (CCSI), which comprehensively reflects consumer sentiment about the current economic situation, was recorded at 93.8 this month. This is a rise of 0.4 points from the previous month. A value greater than 100 indicates that consumer expectations regarding the economic situation are optimistic compared to the historical average (2003-2024), while a value below 100 indicates pessimism.
The head of the team stated, "Consumer sentiment has slightly risen, but it has not yet recovered to pre-martial law levels," adding, "The U.S. tariff policy continues to change, and it is uncertain what scale the supplementary budget and other stimulus measures will take, leaving uncertainties in the situation."
The economic outlook CSI (73) rose by 3 points due to the easing of political uncertainty and expectations for economic stimulus policies following the new government. The interest rate level outlook CSI (96) increased by 4 points due to the strengthening of household loan management and the weakening of expectations for interest rate cuts amid increased exchange rate volatility.
The expected inflation rate (2.8%), which indicates price expectations over the next year, rose by 0.1 percentage points from the previous month. Price increases have expanded, particularly for processed foods. The expected inflation rates for three years and five years later remain the same as the previous month at 2.6%.