Koreans Expect Hotter Home Prices With Central Bank Set to Meet

South Koreans expect the housing market to heat up further, according to a Bank of Korea survey, in data likely to boost bets that the central bank will keep its policy settings on hold later this week.
An index measuring the outlook for home prices climbed to 118 in August from 115 last month, marking a third straight rise, the BOK said in its consumer confidence data released Tuesday. Expectations for goods inflation accelerated by a point to 145, following a drop to 144 in July.
The latest monthly poll may cement views among economists that the BOK will keep its benchmark interest rate at a restrictive 3.5% when the board meets Thursday. Governor Rhee Chang-yong said last month the BOK was wary of adding fuel to the housing market in Seoul with signals for a cut that might spur increases in household debt.
Apartment prices in the Seoul area rose 0.32% last week, the biggest weekly gain since September of 2018.
Most economists have pushed their expected timing for a policy pivot to October from August. The government has also announced a series of measures to boost housing supply in a bid to cool the rise in apartment prices in Seoul and its surrounding areas, where demand for newer middle-class residences has largely returned to levels seen during the pandemic.
The overall consumer sentiment index edged down by 2.8 points to 100.8 in August, according to the BOK. The threshold dividing optimism and pessimism is 100.
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