Three out of five Koreans own their own home, the highest proportion in a decade. The Ministry of Land, Infrastructure and Transport on Tuesday published a survey showing home ownership at 59.9 percent, up 1.9 percent from 2014.
The main reason is that a growing number of middle-income earners buy their own home because jeonse or Korean-style deposit lease prices are going through the roof.
In the Seoul metropolitan area, where many people traditionally rent, home ownership was still at 52.7 percent compared to 68.9 percent in provincial regions.
The main home buyers are middle-income earners who make between W2 million to W4 million a month (US$1=W1,127). Among them, home ownership rose 4.2 percentage points since 2014 to a whopping 62.2 percent last year.
Among high-income earners the rate inched up another 1.6 percentage points to 79.3 percent. But among low-income earners it fell 1.5 percentage points to just 48.5 percent, the lowest on record as homes lie increasingly out of their price range.
The proportion of owner-occupiers — as opposed to people owning a home for investment purposes — stood at a record 56.8 percent.
Chae Mi-ok of the Korea Appraisal Board said, “Middle-income earners won’t put up with high jeonse prices anymore, so they take out mortgages instead and buy the homes they live in”.
The proportion living in jeonse or rental accommodation has risen 5.5 percentage points compared to two years ago to 60.5 percent, but the increase was mostly in monthly rental accommodation.
The proportion of renters surpassed that of jeonse tenants for the first time in 2012 and has grown since. Some 82 percent of Koreans now feel they need to own their own house, up 2.9 percentage points.
Eased lending conditions appear to have played a big role in the increased home ownership.