"This Life Is Doomed" 25 Years to Buy a House in Seoul... The Dream of Owning a Home Drifts Away

Kyungsillyeon "Seoul Apartment Prices Doubled in 4 Years of Moon Administration"
"Can't Buy a House Even Working Hard", "Is There Any Will to Control Housing Prices?" 청 청원
Experts "Real Estate Tax Relief Needed"

A real estate agency located in Seoul. The photo is unrelated to specific expressions in the article. [Image source=Yonhap News]

[Asia Economy Reporter Heo Midam] "It's impossible to own a home in this lifetime."

As analyses show that apartment prices in Seoul have nearly doubled under the Moon Jae-in administration, citizens' frustration is growing even more. In particular, data revealing that it takes 25 years of income to buy a 30-pyeong apartment in Seoul is making the dream of homeownership increasingly distant for ordinary people. Homeless people are uttering self-deprecating words like 'Isaengmang' (this life is ruined). Experts suggest that tax relief policies should be implemented to stabilize the real estate market.

The Citizens' Coalition for Economic Justice (CCEJ) held a press conference on the 23rd and stated, "During the four years of the Moon Jae-in administration, real household income rose by only 7% (2.98 million won), while apartment prices increased by about 93% (570 million won)."

According to CCEJ, the price per pyeong (3.3㎡) of apartments in Seoul was 20.61 million won in May 2017, when the Moon administration began, but four years later in May this year, it rose by 19.10 million won (93%) to 39.71 million won. Based on a 30-pyeong apartment, the price increased from 620 million won to 1.19 billion won, a rise of about 570 million won.

Regarding this, CCEJ said, "Assuming no spending of income, it would take 25 years to purchase an apartment based on average household income."

The rapid rise in housing prices is not unique to South Korea. The United States and Europe, which suffered severe damage from the COVID-19 pandemic, are also experiencing rapid increases in housing prices.

However, in South Korea, the price-to-income ratio (PIR) is the highest among OECD (Organisation for Economic Co-operation and Development) countries. According to the Korea Real Estate Board and others, Korea's PIR at the end of last year (compared to the end of 2019) was 112.7%. This far exceeds other countries such as the United States (106.6%), the United Kingdom (106.5%), Japan (99.5%), Germany (106.9%), France (104.8%), Spain (106.3%), and Australia (99.2%). In other words, it is difficult to own a home by saving only one's salary.

Citizens are looking at apartments in Seoul. The photo is unrelated to specific expressions in the article. [Image source=Yonhap News]

Earlier, the Moon Jae-in administration repeatedly emphasized curbing speculation and stabilizing housing prices from the beginning. President Moon stressed at a 100-day press conference held at the Blue House in August 2017, "To liberate ordinary people and young people from the burden of high housing rents such as crazy jeonse and monthly rents that have troubled our citizens, stabilizing real estate prices is necessary."

At the New Year's press conference in January last year, he also raised his voice, saying, "There has been a rapid price increase that ordinary people find hard to accept," and "We must restore (housing prices) to their original state."

In response, the government announced as many as 25 real estate measures over four years to curb soaring housing prices, but instead, housing prices rose, increasing public confusion and criticism. According to the Korea Real Estate Board, the nationwide housing (apartments, detached houses, row houses) sales price increase rate last year was 5.36%, the highest in nine years since 2011 (6.14%).

Given this situation, posts expressing difficulties in owning a home have been continuously appearing on the Blue House's public petition board. In a petition titled "Opinion on the Democratic Party's decision to cut taxes for real estate rich" posted on the 23rd, the petitioner wrote, "What happened during the four years of the Moon Jae-in administration? More than half of the people are suffering from asset price surges, and many are worried about their livelihoods due to COVID-19."

He added, "Housing prices that labor cannot keep up with, do the Blue House, the Democratic Party, and Deputy Prime Minister Hong Nam-ki see this as normal?" and "You have made hardworking taxpayers fools."

President Moon Jae-in is speaking at the Cabinet meeting held at the Blue House on the morning of the 22nd. [Image source=Yonhap News]

Meanwhile, there were also reactions expressing doubt about whether the government and ruling party truly have the will to curb housing prices. In a petition titled "20s and 30s youth, if you want to own a home in the near future, please petition" posted on the 22nd, the petitioner said, "I want to offer some consolation to young people who feel tremendous relative deprivation due to skyrocketing housing prices." He went on to point out, "I want to know the sincere intention of the Blue House and the National Assembly on whether they really, really intend to curb housing prices."

Meanwhile, six out of ten citizens predicted that housing prices are unlikely to fall in the second half of this year. According to a survey by Real Estate 114 conducted from the 1st to the 15th among 715 adults nationwide on the "Housing Market Outlook for the Second Half of 2021," 62% of respondents expected housing prices to rise in the second half.

Experts pointed out the need for real estate tax relief to stabilize the real estate market. Professor Kim Taek-gi of Dankook University's Department of Economics analyzed, "An important factor in stabilizing the real estate market is whether transactions are active. Increasing the supply of new housing takes a long time. Therefore, now we need to increase the supply of existing housing."

He added, "However, currently, the burden of holding and transaction taxes is heavy, so supply is not coming out. We need to reduce the burden of real estate taxes such as holding and transaction taxes."

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