Seoul, South Korea – South Korea's housing market continues to be a significant challenge for many, with a new government study revealing that it would take an average of 13 years to save enough to buy a home in Seoul without any other expenses.
The Ministry of Land, Infrastructure, and Transport released its 2023 Residential Status Survey, revealing that despite a slight decrease in housing prices due to high-interest rates, the housing market remains out of reach for many.
The Price-Income Ratio (PIR), which measures the number of years it would take to buy a home based on median household income, was highest in Seoul at 13. This means that even if a person saved their entire salary for 13 years, they could still barely afford a home in the capital.
Other regions with high PIRs included Sejong (8.7), Gyeonggi (7.4), and Daejeon (7.1). In contrast, the southern province of Jeonnam had the lowest PIR at 3.1.
While the overall homeownership rate declined slightly to 60.7% in 2023, the need for government assistance in housing increased, with 40.6% of households reporting such a need. The most requested forms of assistance were home purchase loans, rental deposit loans, and monthly rent subsidies.
Key findings from the survey include:
Soaring housing prices: Seoul's housing market remains the least affordable in the country.
Decreased homeownership: The overall homeownership rate has declined slightly.
Rental market: Most young households rent apartments, while elderly households are more likely to own houses.
Government support: Many households expressed the need for government assistance in housing.
The high cost of housing in South Korea has been attributed to a combination of factors, including limited land supply, rising construction costs, and government policies that have favored homeownership. Experts warn that the ongoing housing affordability crisis could have far-reaching consequences for the economy and society, such as hindering economic growth and exacerbating social inequality.
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