"High Possibility of Apartment Price Decline Due to Population Aging"

[Image source=Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] A study has found that regions experiencing aging populations are more likely to see apartment prices decline.

On the 19th, the Korea Insurance Research Institute released a report titled "The Relationship Between Population Aging and Apartment Prices," stating, "We examined the relationship between the aging rate and apartment price change rate across 25 districts in Seoul, and it can be interpreted that the mutual influence between aging and apartment prices has recently become more pronounced."

According to the report, there is a negative correlation between the population aging rate (the proportion of elderly population aged 65 and over) and apartment prices across the 25 districts of Seoul.

Recently, Seoul apartment prices have been led by the Gangnam 3 districts, Gangdong, Yangcheon, and Mayongseong (Mapo, Yongsan, Seongdong), where the 2019 aging rates, except for Yongsan, were lower than the Seoul average of 15.2%. The rates are approximately Seocho (13.2%), Gangnam (13.0%), Songpa (12.9%), Gangdong (14.5%), Yangcheon (13.3%), Mapo (13.9%), and Seongdong (14.6%).

Yongsan (16.8%) has a higher aging rate than the Seoul average (15.2%), but its aging speed is slower. Since 2010, the Seoul average increased by 5.6 percentage points (from 9.6% to 15.2%), whereas Yongsan rose by only 4.4 percentage points (from 12.4% to 16.8%).

Senior Research Fellow Yoon Sung-hoon, who authored the report, commented, "If apartment prices rise in a certain area, the elderly population there is more likely to increase their consumption capacity and move to other areas where this is not the case. Also, if the population aging rate in a region increases, economic vitality declines, negatively impacting apartment prices in that area."

This content was produced with the assistance of AI translation services.