SEOUL, October 17 (AJP) - "I waited for the government to bring housing prices under control, but now it's almost impossible to buy a home even with dual incomes," lamented one salaried worker. Two years ago, he put off purchasing a home, but his dream has now collapsed, following a new set of even stricter real estate and loan regulations announced earlier this week by the Ministry of Land, Infrastructure and Transport.
Under the measures aimed at curbing soaring housing prices, the so-called speculative zones, previously limited to several districts in Gangnam and Yongsan, have been expanded to include all 25 districts of Seoul as well as parts of Gyeonggi Province.
In Seoul's Seongdong district, just north of the Han River, mid-sized apartments that cost 900 million won at the end of 2023 now sell for over 1.2 billion won. Homes for jeonse or traditional lump-sum deposit leases there also jumped from 500 million won to around 800 million won.
What seemed affordable to a dual-income couple two years ago is now out of reach. This is not limited to them. For many people in their 30s, owning a home in Seoul, once considered a key indicator of middle-class status, is no longer an attainable dream.
The average price of a 59-square-meter apartment, popular among many young couples, has surpassed 1 billion won, with Seoul's upscale districts of Gangnam, south of the Han River, exceeding 2 billion won.
Even with an annual salary of 100 million won, it would take more than a decade of saving every penny just to afford a small apartment in Seoul. No wonder many young people see the housing market as where inequality begins.
The measures restricted regulations on leases and loans for those who want to have their home without plans to increase housing supply, in a bid to curb high-priced homes and speculative investors, fueling anxiety among young people.
Without specific plans to increase housing supply, the measures merely tightened regulations on leases and loans for those hoping to secure at least an affordable home for themselves, in a bid to curb high-priced homes and speculative investors, fueling anxiety among young people.
Strict loan restrictions alone cannot resolve issues in the real estate market, which are intertwined with broader social factors such as marriage, fertility, and labor mobility.
To address the market spiraling out of control, policymakers should come up with separate measures for genuine homebuyers and speculators. If housing supply cannot keep pace with demand, direct government intervention would also be necessary.
Even if these measures and policies are headed in the right direction, they will be in vain if not implemented in a timely manner. The government must also strive to achieve tangible results, rather than making empty pledges.
* This article, published by Aju Business Daily, was translated by AI and edited by AJP.
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