“Long shot” dream: It is increasingly hard for an ordinary South Korean to own “my home” in Seoul. (Image credit: Kobiz Media/Korea Bizwire)
SEOUL, Sept. 26 (Korea Bizwire) –A new study has found that young adult couples in their 20s and 30s must save up for more than 15 years without spending a single cent in order to purchase a respectable apartment unit in Seoul.
According to Statistics Korea, the average monthly disposable income for households under 39 years of age was tabulated at 3.615 million won in the second quarter of this year. According to the Korea Appraisal Board, an apartment unit that lies in the medium-price category in Seoul, as of June this year, was 664 million won.
Disposable income is what remains after the deduction of taxes and social security charges, available to be spent or saved as one wants. This means that young adults in their 20s and 30s would have to save up their entire disposable income for at least 15.3 years to buy an apartment unit of that caliber in Seoul.
The time it takes for people to save up to buy their own homes is getting longer every year. In 2014, experts estimated that it would take young couples 10 years to buy their own homes. The next year, the duration was extended to 12.3 years.
Image courtesy of Hyundai Engineering and Construction.
Last year, the period was prolonged even further to 13.7 years. Following the deregulation of the real estate market in 2014, home prices started to jump as a significant amount of capital was injected into the market. And as the economy started to slow down, the job market became especially difficult for a younger generation of job seekers, creating a stagnation in income increases for that demographic.
The study found that the time it would take for young people to be able to afford their own homes has become further out of reach in recent years. In the second quarter of this year, experts estimated that young adults had to set aside their disposable household income for a staggering 17.4 years to purchase their own home. Professor Jeong Se-eun of Chungnam National University said that this is having a negative impact on how young couples approach family planning.
“Most young adults are refraining from marriage or having children because their economic condition has not improved,” said the professor. Jeong suggested that educating the young population on ways to accumulate human capital could help alleviate the problem. “In addition, expanding access to public housing for young adults could be a possible measure,” suggested the professor.
“Long shot” dream: It is increasingly hard for an ordinary South Korean to own “my home” in Seoul. (Image credit: Kobiz Media/Korea Bizwire)
H. S. Seo (hsseo@koreabizwire.com)
