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Consumer sentiment hits seven-year high in August as housing market optimism grows

Published: 26 Aug. 2025, 17:37

Apartments are seen in Seoul on Aug. 25. [NEWS1]

Korean households expressed stronger optimism about the housing market and the economy in August, with home price expectations increasing and consumer sentiment at its highest point in more than seven years, boosted partly by government-issued consumer coupons.

The Bank of Korea (BOK) said on Tuesday that its Consumer Survey for August showed the housing price outlook index at 111. The index had climbed to 120 in June but dropped to 109 in July after the government introduced new loan restrictions on June 27. It rebounded by 2 points in August.

A reading over 100 means more respondents expect housing prices to rise over the next year than fall. The current level remains above the long-term average of 107 from 2013 to 2024.

“While housing prices have stabilized somewhat nationwide, prices continue to rise in parts of the greater Seoul area, which contributed to the index increasing,” BOK official Lee Hye-young said. “That said, the rebound is modest and still well below the June level of 120. We need to watch longer-term trends to assess the full policy impact.”

Overall consumer sentiment also continued to improve. The Composite Consumer Sentiment Index (CCSI), which gauges perceptions of current and future economic conditions, rose 0.6 points on month to 111.4. This marks the highest level since January 2018, when the index recorded 111.6.

The CCSI is based on six components, including household income outlook and current living conditions. A score above 100 indicates optimism; below 100 suggests pessimism. The long-term average from 2003 to 2024 is used as the baseline.

The CCSI had plunged to 88.2 in December last year after the Dec. 3 martial law. It recovered above 100 in May as the launch of the Lee Jae Myung administration approached and the United States temporarily paused reciprocal tariff measures.

The August uptick in sentiment was supported by consumer coupons — government-issued vouchers designed to stimulate household spending and support small businesses — issued through a supplementary budget and an uptick in exports.

A banner reading “Consumer Coupon Accepted Here” hangs outside a shop in Gyeongsan, North Gyeongsang on July 27. [YONHAP]

But the index measuring future economic outlook fell by 6 points to 100, reflecting a mixed outlook among respondents.

“This indicates an even split between those who think the economy will improve and those who expect it to worsen,” Lee said. “Concerns over renewed U.S. tariffs have also weighed on expectations.”

The impact of consumer coupons also showed up in spending data. Card sales at small businesses nationwide rose 6.44 percent from a year earlier during the four-week period from July 21 to Aug. 17, according to Korea Credit Data.

Retail sales increased 16.47 percent, with eyewear shops seeing the largest year-on-year gain at 43.95 percent.

Other sectors with double-digit growth included fashion and accessories at 33.16 percent, toys at 32.74 percent, e-cigarettes at 31.30 percent and cosmetics at 30.11 percent. Dining posted a gain at 3.51 percent, with service businesses at 4.73 percent.

“We saw clear effects from the consumer coupons at small shops with annual revenue below 3 billion won ($214,000),” said Kang Ye-won, head of data at Korea Credit Data.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY PARK YU-MI [[email protected]]