"Home Prices Will Fall" – Housing Price Outlook Sees Sharpest Drop in 3 Years and 7 Months

According to The Financial News, the Housing Price Outlook Consumer Sentiment Index (CSI) in the February Consumer Tendency Survey fell to 108, down 16 points from the previous month. This is the steepest decline in three years and seven months, since July 2022. The drop is seen as reflecting stronger expectations among consumers for lower housing prices, following the end of the temporary easing of capital gains tax on multiple-home owners and the announcement of the January 29 Housing Supply Package.
The Bank of Korea (BOK) released the "Results of the February 2026 Consumer Tendency Survey" on the 24th, showing that the Housing Price Outlook CSI fell 16 points from 124 a month earlier to 108.
The BOK explained, "Consumers' expectations for a decline in housing prices appear to have strengthened due to government policy announcements, including the end of the temporary easing of capital gains tax on multiple-home owners and the January 29 Housing Supply Package."
A BOK official noted, "As the pace of housing price increases has recently slowed, particularly in Seoul, consumer sentiment seems to have weakened further." The official added, "It will be necessary to monitor real estate market conditions to see to what extent consumers' expectations of falling home prices will actually affect market supply and demand."
Consumer sentiment showed a slight improvement. The Composite Consumer Sentiment Index (CCSI) rose 1.3 points from the previous month to 112.1, indicating a recovery in optimism about the economy.
The Current Economic Assessment Consumer Survey Index (Current Economic Assessment CSI) climbed to 95, up 5 points, and the Consumer Sentiment Index for Future Economic Conditions rose 4 points to 102. These gains were supported by strong semiconductor-led exports and a buoyant stock market.
The February outlook index for the general price level stood at 147, down 1 point, while the outlook index for wage levels was unchanged from the previous month at 123.
Expected inflation for the next year was 2.6%. The outlook for three and five years ahead was 2.5% in both cases, indicating continued stability.
The CCSI is calculated by aggregating and standardizing six key indices: current living conditions, outlook for living conditions, outlook for household income, outlook for consumption spending, current economic assessment, and outlook for future economic conditions. A reading above 100 indicates optimism compared with the historical average, while a reading below 100 indicates pessimism.
imne@fnnews.com Hong Ye-ji Reporter