Recent research conducted by the Korean Trade Union revealed that workers in their 20s would need an average of 86 years to afford an apartment in the capital city with their current salaries. Lee Han-jin, a researcher at the Labor Institute of the Korean Trade Union, conducted this research based on official statistics on household finances and real estate market data.
The study found that the average savings of householders aged 20-29 in the country in 2023 amounted to 13.9 million won (approximately $10,000). In contrast, the average transaction price for an apartment in Seoul is 1.2 billion won ($873,000). This means that a worker in their 20s in Korea would have to save for 86.4 years to be able to purchase an apartment in the capital.
The research also highlighted that the income growth rate of workers in their 20s over the past decade has been 21%, which is significantly lower compared to the salary growth rate of workers of all ages. Additionally, the savings growth rate for this age group was only 12.6%, much lower than the 65% rate for workers of all ages.
The surge in real estate prices in recent years has widened the wealth gap between Korea’s younger generation and older generations. Nationwide, house prices in Korea have increased by 45% in 2021 alone, with Seoul being particularly expensive. The government is making efforts to develop suburban areas and high-speed train networks to encourage young people to consider purchasing homes outside of Seoul.
The high cost of housing in Seoul has led many young Koreans to postpone marriage and starting a family, as they face the difficulties of affording housing in the capital city. This issue has become a significant concern for policymakers in Korea, who are striving to address the challenges faced by the younger generation in the housing market.