Shinhan Financial Group’s Shinhan Future Strategy Research Institute on Saturday released a report, “What Will Change If Home Prices Stabilize,” examining how housing price stability affects household finances and financial markets.
The report said that in an asset structure where about 70% of household wealth is concentrated in real estate, higher home prices can widen wealth gaps and raise housing costs, weighing on consumption and the broader economy.
As of 2025, the top 20% by net assets held 65% of total net assets, the report said. The bottom 40% held 4.8%. It added that younger generations’ assets accounted for 44% of the contribution to inequality, indicating that whether parents own real estate increasingly determines children’s starting point in wealth accumulation.
The net-asset Gini coefficient, a measure of inequality in which values closer to 0 indicate more equal distribution, reached 0.625 last year, the highest since records began, the report said. South Korea’s PIR, the price-to-income ratio, stood at 24.1, far higher than in major advanced economies. That implies a median-income household would need more than 24 years to buy a home even if it saved all of its income.
Housing costs are also directly affecting consumption, the report said. With 76% of household assets tied up in real estate, about 20% of households were classified as “wealthy but liquidity-constrained,” meaning that even if home prices rise, their ability to spend remains limited.
The report projected that if home prices stabilize and housing costs ease, the biggest rebound in consumption would come among young and middle-aged groups. It said people ages 25 to 39 currently show the sharpest consumption pullback linked to rising home prices, making a rebound more likely if the burden eases. It also expected more stable housing costs to lower barriers to marriage and childbirth for young adults and increase spending on education, self-development and investment for career changes.
The institute also forecast changes in financial-market demand. If the burden of buying a home declines, demand could rise among young people and newlyweds for early wealth-building products such as installment savings accounts, youth individual savings accounts (ISA) and regular investment funds, it said.
“Easing the housing-cost burden can bring positive changes across household life, including a recovery in consumption and improved conditions for marriage and childbirth,” the institute said.
* This article has been translated by AI.
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