Despite All-In Efforts, Ultimately Disposed... Youth Selling, Foreigners Buying in the 'Chaotic Real Estate' Market

Real Estate Assets of Household Heads Under 39 and in Their 30s Decline
Foreign Landlords Increase by 3,700 Households in Half a Year

The housing assets of young household heads have fallen by 20% in just one year. As interest expenses increased due to high interest rates, some appear to have liquidated real estate assets. This contrasts with the increase in foreign landlords during the same period.

According to the recently released "Household Financial Welfare Survey" by Statistics Korea, as of the end of March this year, the average asset holdings of household heads aged 39 and under amounted to 336.15 million KRW, a 7.5% decrease compared to the previous year. Among them, the average assets of household heads in their 30s were 386.17 million KRW, down 6.4% from the previous year.

View of downtown apartment complexes from Namsan, Seoul.
[Photo by Yonhap News]

Looking at the assets of household heads aged 39 and under by asset type, tangible assets decreased by 15% from last year to 202 million KRW this year. Among tangible assets, real estate dropped significantly from 219.27 million KRW last year to 180.01 million KRW this year, a 17.9% decrease. In particular, residential real estate assets fell by 20%.

The situation for household heads in their 30s was similar. During the same period, tangible assets decreased by 13.3%, and real estate declined by 15.9%. Residential housing assets fell by 18.2%.

The sharp decline in real estate assets of household heads aged 39 and under and those in their 30s over one year is attributed to the impact of high interest rates. The Bank of Korea's base rate has risen from the 0% range in 2021 to surpass 3% last year and has been maintained at 3.50% since early this year. As a result, some borrowers are believed to have felt the burden of loan interest expenses and disposed of real estate assets.

In fact, according to Statistics Korea's housing ownership statistics, the number of young homeowners has significantly decreased. The number of homeowners in their 30s dropped by 106,000 from 1,647,000 last year to 1,541,000 this year, and homeowners under 30 decreased by 17,000 from 291,000 to 274,000.

On the other hand, foreign landlords increased during the same period. The number of houses owned by foreigners in Korea reached approximately 87,223 households, increasing by about 3,700 households over the past six months. Despite the real estate market downturn caused by the high interest rate trend, the volume of domestic building transactions by foreign landlords increased, and the number of those renting out purchased homes also rose.

According to data from the Ministry of Land, Infrastructure and Transport, as of June this year, foreign-owned houses were counted as follows: 47,327 households owned by Chinese nationals, 20,469 by Americans, 5,959 by Canadians, 3,286 by Taiwanese, and 1,801 by Australians. Most of these are concentrated in Seoul and the Gyeonggi area.

Meanwhile, as speculative and illegal transaction suspicions have increased in foreign real estate transactions, public resentment has grown, leading to stronger demands for countermeasures. Various policies have been introduced so far as part of real estate stabilization measures, but foreigners have faced relative reverse discrimination due to the lack of appropriate regulatory measures.

The Ministry of Land, Infrastructure and Transport has announced that it will actively crack down on foreign real estate speculation. In the first housing speculation investigation released last year, 567 suspected illegal acts were detected, and the results of the second planned investigation will be disclosed this month.

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