56% of respondents expect home prices to rise in second half of 2026

A view of the Gangnam area in Seoul, where apartments and multi-family homes are interspersed. [Yonhap]

A majority of respondents to a recent survey expect home prices to rise in the second half of this year, with bearish views remaining a minority.

Real estate data firm Budongsan114 said Wednesday that 56 percent of the 1,602 people surveyed nationwide from July 13 to July 22 expect housing transaction prices to increase in the second half of 2026. Only one in 10 respondents — 10 percent — expect prices to fall.

Compared with the first-half survey, the share expecting a price increase rose 4 percentage points while the share expecting a decline fell by the same margin; 34 percent expected prices to hold steady, unchanged from the earlier survey. Sustained price strength in key metropolitan areas and concerns over a supply shortage drove a prevailing view that the upward trend will continue into the second half.

Expectations for higher lease prices also strengthened compared with the previous survey.

The share of respondents expecting jeonse prices to rise climbed from 57.75 percent in the first-half survey to 61.86 percent, while those expecting monthly rent to increase rose from 60.91 percent to 65.04 percent. Budongsan114 said the results reflect a view that upward price pressure will persist across the rental market, as weakening homebuying sentiment drives more demand into the jeonse market while conversions of jeonse contracts to monthly rent arrangements continue.

Among those who expect transaction prices to rise, the most commonly cited reasons were rising apartment prices in key areas (32.33 percent), followed by a deepening supply shortage in major urban centers such as Seoul (16.95 percent).

One in three respondents who expect prices to fall cited weakened buying demand due to loan regulations (34.55 percent). With banks tightening lending under aggregate household loan caps — and mortgage limits in regulated zones now capped at 600 million won ($409,000) or below — respondents said deteriorating financing conditions would dampen buying activity and reduce transactions. Other factors cited for a potential price decline were the possibility of an economic slowdown (18.18 percent), an increase in properties listed for sale due to interest and tax burdens (14.55 percent), the impact of loan interest rate burdens (12.12 percent), and reduced demand due to price affordability concerns (6.67 percent).

Among the 991 respondents who expect jeonse prices to rise, 34.51 percent (342 people) said weakening homebuying sentiment would push more demand into the jeonse market, lifting prices. The result reflects a view that as the government maintains tighter lending policies, more prospective buyers will delay purchasing a home and remain in the jeonse market.

Concerns about a supply-demand imbalance in the jeonse market also grew, with 23.92 percent citing a shortage of jeonse listings due to landlords' preference for monthly rent arrangements, and 18.26 percent pointing to insufficient move-in supply in popular areas such as Seoul. Additional factors cited included a rise in temporary jeonse tenancy for apartment subscription purposes (10.39 percent), a decrease in jeonse supply due to stricter owner-occupancy requirements tied to the expansion of land transaction permit zones (7.16 percent), and a decline in new jeonse listings as more existing contracts are renewed rather than turned over (5.25 percent).

Some respondents expected jeonse prices to fall, with 22.12 percent citing the expected effect of the government's jeonse market stabilization measures. Other factors cited for a potential decline were landlords' concerns about returning deposits — so-called reverse-jeonse risk — leading to price adjustments (19.23 percent), reduced jeonse demand due to tighter jeonse loan regulations and associated burdens (19.23 percent), and decreased demand due to high jeonse price levels (16.35 percent).

When asked about the key variables likely to affect the real estate market in the second half, respondents most frequently selected "external economic conditions, including the pace of domestic and global economic recovery" at 37.45 percent. "Whether the Bank of Korea raises its benchmark interest rate" followed closely at 37.33 percent, and "changes in the real estate regulatory environment, including loans and taxes" also drew a high response rate of 34.58 percent.

Further down the list were the current government's large-scale housing supply policy through public land development (25.22 percent), whether instability in the jeonse and monthly rent market persists (22.47 percent), inflation (19.29 percent), and changes in domestic real economic indicators such as private consumption (19.10 percent). Other variables cited included shifts in the construction sector due to rising building costs (16.67 percent), whether the government expands regulated zones (12.67 percent), and whether multi-home owners and rental business operators release properties onto the market (9.36 percent).

Budongsan114's semi-annual housing market outlook survey has been conducted twice a year since 2008. The second-half 2026 edition was carried out over 10 days from July 13 to July 22, covering 1,602 respondents nationwide. The survey has a margin of error of plus or minus 2.45 percentage points at a 95 percent confidence level.

hope@heraldcorp.com