Expectations for further home-price gains in South Korea are cooling sharply among middle-aged households, signaling a potential shift in sentiment among the country’s most active real-estate buyers.
Data released by the Bank of Korea show that housing-price outlook indices for people in their 40s, 50s and 60s all posted steep declines in February, with each group recording drops of around 19 points from the previous month. The pullback marks one of the most pronounced sentiment shifts since mid-2022.
The change is notable because these age groups account for a disproportionate share of property transactions in South Korea. Buyers in their 40s through 60s typically have higher purchasing power, more stable income streams and greater access to credit, making them central to market liquidity and price formation.
Among them, sentiment among those in their 50s weakened the most visibly, with the index falling to a level that suggests expectations for price increases and declines are now roughly balanced. That marks a sharp reversal from just a month earlier, when optimism about further gains remained firmly intact.
The shift extends beyond age demographics into income brackets closely tied to actual market activity. Middle- and upper-middle-income households—groups most likely to participate in home purchases—also recorded the steepest declines in expectations, reinforcing the view that the slowdown is concentrated among active buyers rather than marginal participants.
The data point to a broader recalibration in a market that has long been driven by expectations of steady appreciation. For years, price momentum in Seoul and surrounding areas has been underpinned not only by supply constraints and redevelopment prospects but also by entrenched belief in long-term gains.
That belief now appears to be softening. While home prices themselves have yet to show a decisive downturn, weakening expectations among core buyers could translate into reduced transaction volumes, longer selling times and increased price negotiation in the months ahead.
Policy signals may be contributing to the shift. Under President Lee Jae-myung, the government has emphasized tighter oversight of speculative activity and a willingness to deploy additional measures to stabilize the housing market. Even without immediate price declines, such messaging can influence expectations—particularly among buyers with the most at stake.
Still, the implications remain uncertain. A pullback in sentiment does not necessarily translate into a sustained correction, especially in supply-constrained districts where demand remains structurally strong. But if caution among middle-aged buyers persists, it could weaken one of the market’s most reliable sources of upward pressure.
For now, the signal is less about falling prices than about fading conviction. In a market long defined by confidence in ever-rising values, that alone marks a meaningful change.
