Demand for senior housing in South Korea is high, but actual supply remains critically low. Analysts suggest a need for mid-range options between high-end senior housing and standard care services.
On September 15, commercial real estate service firm AlSquare released its report titled '2026 Senior Housing Report: One in Three Citizens is a Senior, Is Korea Prepared?'
According to the report, the population aged 60 and older in South Korea is projected to reach approximately 15.17 million by 2026, accounting for 29% of the total population. By 2050, this number is expected to rise to about 22.18 million, or 47% of the population. Currently, one in three citizens is a senior, but in 25 years, this ratio could shift to nearly one in two.
The number of seniors with purchasing power is also increasing. The proportion of high-income households among those aged 60 and older, earning over 100 million won annually, rose from 21% in 2017 to 37% in 2025. As the population grows, so does the demand for senior housing and services.
Despite the confirmed demand, the primary barrier to entry is the cost. A survey conducted by the Korea Research Institute for Human Settlements found that 64% of respondents expressed interest in moving to senior housing. However, 68% cited price and cost as the main deterrent. When choosing housing, 60% considered price and costs, while 51% prioritized access to medical and care services.
Supply is also limited. The current supply rate of senior housing facilities in South Korea stands at just 0.11%. In comparison, the rates are 5.58% in the United States, 4.42% in the United Kingdom, and 2.12% in Japan, indicating a significant shortfall, particularly when compared to the U.S.
AlSquare noted that while the senior housing market in South Korea has substantial growth potential due to aging and increased demand for housing and care services, factors such as land and building ownership requirements, complex permitting processes, and limited financing options hinder supply expansion.
Specifically, while high-end senior housing is seen as unaffordable, there is a lack of products targeting the mid-range demand for a variety of services beyond standard care. Simply increasing the supply of high-end senior housing will not adequately meet the growing demand.
As a potential solution to unmet demand, AlSquare proposed the establishment of daycare centers. These centers would allow seniors to live in their existing homes while accessing health care, rehabilitation, meals, and leisure services. This model reduces the financial burden associated with moving into senior housing while offering a broader range of services than standard care.
From a real estate perspective, daycare centers can utilize existing buildings, providing greater flexibility in asset sales compared to senior housing facilities. Long-term lease agreements with specialized operators could also be explored.
Furthermore, it was suggested that senior housing should diversify its business structure by combining real estate ownership with service operations, potentially through partnerships with specialized operators and real estate investment trusts (REITs).
As the pace of aging accelerates, the senior housing market is expected to focus on segmenting products by price range and integrating care and medical services, which will be key to its competitiveness.
According to Ahn Tae-jin, a researcher at AlSquare, “While there is a high intention to move into senior housing, the most significant constraint is the financial burden, and there is also a strong demand for integrated medical and care services. The senior housing market is likely to evolve into an industry that provides integrated lifestyle design and support services encompassing housing, healthcare, care, and community services.”
* This article has been translated by AI.
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