The government has flagged one loan and tax curb after another, and yesterday’s KB data showed Seoul home-price gains slowing for the first time. Even so, consumers’ expectations for home prices have climbed to their highest in four years and ten months. In the Bank of Korea’s July consumer survey released on the 28th, the home-price outlook index (CSI) rose 7 points from a month earlier to 127. This gap — with policy and sentiment moving in opposite directions — has become the biggest variable for the comprehensive package due in late July or early August. 🏠

TL;DR: The Bank of Korea’s July home-price outlook CSI reached 127, up 7 points month-on-month and the highest since September 2021 (128) — four years and ten months. Gyeonggi Province hit 129, its highest in about 58 months. The Composite Consumer Sentiment Index (CCSI) also held above 100 for a third straight month at 106.8. Despite flagged loan and tax curbs, expectations that “prices will rise further” have grown, and the government’s comprehensive package and tax-reform plan are due between late July and early August.

📈 How much did the outlook index rise?

The July home-price outlook CSI stood at 127, its highest level in four years and ten months. According to the Bank of Korea’s “July 2026 Consumer Survey” released on the 28th, the index rose 7 points from the previous month, extending its climb to a fourth straight month. It is the highest reading since September 2021 (128), during the pandemic.

The home-price outlook CSI turns consumers’ answers about whether prices will be higher or lower a year from now into an index. A reading above the 100 baseline means more people expect prices to rise than to fall. At 127, sentiment leans firmly toward further gains.

🗺️ Why did Seoul and Gyeonggi drive the index up?

The rise was led by strength in sale and jeonse (lump-sum lease) prices across the greater Seoul area. The Bank of Korea also cited continued gains in apartment sale and jeonse prices, centered on the two regions, as the backdrop. Notably, Gyeonggi Province’s home-price outlook CSI reached 129, its highest in about 58 months since September 2021 (130).

Jeonse prices are stoking sentiment too. Seoul’s apartment jeonse supply-demand index had climbed to 125.9 as of late June — its highest in about five and a half years since early 2021 — a sign of how scarce jeonse listings have become. On top of that, Herald Corp reported that the average Seoul apartment jeonse price topped 700 million won for the first time ever. With sale and jeonse prices rising together, the expectation that “if I don’t buy now it will only get pricier” has strengthened.

💳 Why do expectations grow even as curbs tighten?

Expectations are rising despite tighter rules because worries over short supply and ample liquidity are offsetting the effect of the curbs. This year, the debt-service ratio (DSR) has been applied more broadly and mortgage limits in regulated zones have been lowered, raising the bar for borrowing — yet consumers still lean toward further price gains.

Broad optimism about the economy also played a part. July’s Composite Consumer Sentiment Index (CCSI) rose 0.2 point from a month earlier to 106.8, holding above the 100 baseline for a third straight month since May. The Bank of Korea said strong semiconductor-led exports and investment, along with expectations of wage growth, supported sentiment. On the political side, however, pushback against a curb-only approach is growing: on the 28th, People Power Party leader Jang Dong-hyeok sharply criticized the government’s property policy, arguing it had invited the supply shortage and liquidity surge itself while squeezing loans only for young people and ordinary earners.

📅 What to watch in the imminent policy package

The key is how much the coming package can rein in these expectations. Deputy Prime Minister and Finance Minister Koo Yoon-cheol had said the property tax-reform plan would be announced around late July, and the comprehensive package and tax-reform plan are expected between late July and early August. How to balance holding taxes and transaction taxes is cited as a core issue.

With sentiment near a five-year peak, the strength and direction of the package could swing the market’s temperature in the second half considerably. Whether the curbs cool sentiment — or whether the “breather” shown in yesterday’s KB data proves temporary — is the point to watch over the coming weeks.

Overall take

This survey puts the “gap between policy and sentiment” into numbers. Even as loan and tax curbs tightened and some data showed gains slowing, consumers’ home-price expectations rose to their highest in four years and ten months. It reads as the combined effect of joint strength in Seoul-Gyeonggi sale and jeonse prices, supply-shortage worries, and firm consumer sentiment. That said, the outlook index reflects “sentiment” rather than actual prices and is a leading indicator, so it is worth watching alongside the comprehensive package due in late July to early August and the actual flow of transactions and prices.

※ This article is for informational purposes only and is not investment advice.

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