In recent years, the cost of housing in Seoul has skyrocketed, making it difficult for young Koreans to afford an apartment in the capital city. According to a study conducted by the Labor Institute of the Korean Trade Union, a worker in their 20s would need to save for an average of 86 years to purchase an apartment in Seoul with their current salaries.
The research was based on official statistics on household finances and real estate market data. It found that the average savings of householders aged 20-29 in Korea in 2023 amounted to just 13.9 million won (approximately $10,000), which is significantly lower than the average transaction price for an apartment in Seoul, which is 1.2 billion won ($873,000).
Lee Han-jin, a researcher at the Labor Institute of the Korean Trade Union, highlighted that the income growth rate of workers in their 20s over the past decade has been only 21%, much lower compared to the salary growth rate of workers of all ages. Additionally, the savings growth rate for this age group was just 12.6%, much lower than the 65% rate for workers of all ages.
The surge in real estate prices has widened the wealth gap between Korea’s younger generation and older generations. The government is taking measures to develop suburban areas and high-speed train networks to encourage young people to consider purchasing homes outside of Seoul. However, despite these efforts, many young Koreans continue to postpone marriage and starting a family due to the difficulties they face in affording housing in Seoul.
The high cost of housing has become a significant concern for policymakers in Korea as they strive to address the challenges faced by the younger generation in the housing market.
