Consumer expectations that home prices will rise going forward expanded for a fourth straight month to the highest level since September 2021, the Bank of Korea said on the 28th. As home prices have climbed mainly in the greater Seoul area despite government curbs, more consumers think the trend will continue.
According to the "July consumer sentiment survey results" the Bank of Korea released on the 28th, the home price outlook index rose 7 points from the previous month to 127. It is the highest level in 4 years and 10 months since September 2021 (128). When this index exceeds 100, it means more respondents think home prices will rise in a year.
A Bank of Korea official said, "As the recent rise in dwellings prices has broadened, it is affecting consumer expectations," and noted, "It is necessary to look into how measures such as higher lending rates and a reduction in the loan limit will affect sentiment on dwellings prices."
Consumers' economic sentiment improved. The July consumer sentiment index was 106.8, up 0.2 points from the previous month, rising for a third straight month. Although high inflation and a strong dollar-won rate persisted, sentiment turned positive as major conglomerates' earnings improved on the back of strong semiconductor exports.
Expected inflation, meaning the rate of consumer price increases that consumers anticipate a year from now, fell 0.1 percentage point to 2.7%.