Seoul’s Housing Crisis Deepens: A Generation Priced Out
Seoul is facing a growing housing affordability crisis, with the number of 20- and 30-something residents without homes nearing a record high. Recent data reveals a stark reality: nearly 1 million individuals under 40 in Seoul are without property, marking the highest figure since records began.
The Shrinking Dream of Homeownership
The dream of owning a home is slipping away for many young South Koreans. In 2024, just 17.9% of those under 40 in Seoul owned property, a significant drop from previous years. Nationally, the homeownership rate for this age group stands at 26.3%, while the broader 수도권 (Seoul Metropolitan Area) sees a rate of 24.6%. This trend highlights a widening gap between aspiration and reality.
Rising Costs, Stagnant Incomes
The core of the problem lies in a combination of soaring housing costs and sluggish income growth. Monthly rent for those under 40 reached 214,000 Korean Won in the third quarter of last year – the highest since data collection began in 2019. Interest payments on mortgages and loans have been steadily increasing, with the average monthly cost for this demographic rising to 166,000 Won, marking three consecutive quarters of growth.
Despite these increasing financial burdens, income growth for young adults remains stubbornly low. In the same period, the average monthly income for those under 40 increased by only 0.9%, the lowest across all age groups. Disposable income – earnings after taxes and interest – has likewise stagnated, and savings rates are declining.
A National Trend
This isn’t solely a Seoul issue. Across the entire country, the number of under-40s without homes reached 3.61 million in 2024, the highest figure since 2015 when data collection began. The 수도권 area accounts for 2.04 million of these individuals, demonstrating the concentration of the problem in the most populated regions.
Government Response and Future Outlook
The South Korean government has pledged to increase housing supply, aiming to provide 1.35 million homes in the 수도권 area by 2030. However, the effectiveness of these measures remains to be seen. The recent slowdown in housing permits and construction starts suggests that bridging the gap between supply and demand will be a significant challenge.
The shrinking number of young homeowners is a worrying sign for the future. It not only impacts individual financial security but also has broader economic implications, potentially affecting consumption and long-term economic growth.
FAQ
Q: What is the current homeownership rate for those under 40 in Seoul?
A: 17.9% as of 2024.
Q: What is driving up housing costs in Seoul?
A: A combination of limited supply and high demand, particularly in the 수도권 area.
Q: Is the government taking any action to address this issue?
A: Yes, the government has committed to increasing housing supply, aiming for 1.35 million new homes by 2030.
Q: What is happening with rent prices?
A: Rent prices for those under 40 have reached a record high, increasing to 214,000 Korean Won per month in the third quarter of last year.
Q: Is income increasing for young adults?
A: Income growth for those under 40 is the lowest across all age groups, increasing by only 0.9%.
Did you recognize? The number of homes built in the last five years in Seoul is less than half of what was built in the previous five-year period.
Pro Tip: Explore government programs and incentives designed to assist first-time homebuyers. These programs can provide financial assistance and favorable loan terms.
What are your thoughts on the housing situation in Seoul? Share your experiences and opinions in the comments below. For more in-depth analysis of the South Korean economy, subscribe to our newsletter!
