An average family would need to save their entire income for over a decade to afford a mid-priced apartment. (Image courtesy of Yonhap)
SEOUL, Sept. 5 (Korea Bizwire) – A new study has revealed the stark reality of homeownership in South Korea’s capital, where the average family would need to save their entire income for over a decade to afford a mid-priced apartment.
According to data from KB Real Estate Data Hub released on September 3, a household with an annual income of 78.12 million won would need 11.5 years of saving every penny to purchase a 900 million won apartment in Seoul. This figure is based on second-quarter data for this year.
The Price to Income Ratio (PIR) for Seoul stood at 11.5 in the second quarter. While this marks a decrease from the peak of 14.8 observed during the real estate boom in the second quarter of 2022, experts caution that the apparent improvement may be partly due to an increase in median household income, which rose from 59.1 million won two years ago to 78.12 million won in the second quarter of this year.
The housing affordability crisis appears less severe in neighboring regions, with Gyeonggi Province and Incheon showing PIRs of 8.9 and 8, respectively.
However, real estate analysts predict that Seoul’s PIR could climb even higher as new apartment prices continue to soar and record-breaking sales become more frequent in certain areas.
The Korea Real Estate Board reports that Seoul’s apartment price index has been on an upward trajectory for 23 consecutive weeks, with a 0.26% increase in the most recent week alone.
The widening gap between high-end and affordable housing in Seoul is also cause for concern.
KB Real Estate’s monthly housing market trend data shows that in August, the price disparity between the top 20% and bottom 20% of apartments in Seoul reached its highest level since records began in December 2008.
The average price for top-tier apartments stood at 2.58 billion won, 5.27 times higher than the 488.73 million won average for the bottom tier.
M. H. Lee (mhlee@koreabizwire.com)
