Housing Market Capitalization Exceeds GDP by Three Times for the First Time... 'Concerns Over Housing Price Bubble'

Goh Yong-jin Reveals 'Housing Market Capitalization Relative to GDP Since 2010'
Last Year's Housing Market Capitalization at 6534 Trillion Won
Last Year's Nominal GDP at 1941 Trillion Won
Real Estate Price Increase Outpaces Income Growth

[Asia Economy Reporter Naju-seok] Due to factors such as rising real estate prices, the total market value of housing last year exceeded the Gross Domestic Product (GDP) by more than three times for the first time in history. This is because real estate prices have surged sharply compared to income growth.

According to the Bank of Korea's "Status of Housing Market Value Compared to GDP Since 2010," disclosed by Democratic Party lawmaker Ko Eum-jin on the 22nd, the total housing market value last year was 6,534 trillion won, which is 3.2 times the nominal GDP of 1,941 trillion won last year. While the total housing market value rose 14.1% from the previous year, nominal GDP increased by only 6.8%.

The total housing market value consists of residential buildings (producer assets) and attached land (land assets), with residential buildings accounting for 2,065 trillion won (31.6%) and attached land 4,469 trillion won (68.4%).

The ratio of housing market value to GDP was 1.6 times in 2000 but rose to 2.4 times by 2009 due to a booming real estate market. Afterwards, with the global financial crisis and a sluggish real estate market, the ratio remained flat for about ten years. Since 2017, housing prices have risen sharply again, reaching 3.2 times last year.

Lawmaker Ko's office stated, "The rapid rise in the housing market value relative to GDP reconfirms concerns about a recent housing price bubble," adding, "The price-to-income ratio (PIR) at the end of last year was 7.6 times, significantly exceeding the long-term average of 5.3 times, marking a historic high. In Seoul, the figure was 19 times at the end of last year, more than 72% higher than the long-term average of 11 times."

[Image source=Yonhap News]

Lawmaker Ko emphasized, "Our country's housing market value relative to GDP is at a very high level," and added, "Stabilizing the real estate market is a very important task for the housing stability of ordinary citizens and macroeconomic soundness."

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