Ministry of Land, Infrastructure and Transport’Residence Survey’… I expected it, but the housing anxiety intensified
Last year’s multiple of housing price compared to annual income’ increased by 14.1 times in Seoul and 10.1 times in the metropolitan area
2 years more than last year… Contrary to expectations, the burden on tenants has decreased since the ‘Lease Act 3’
It’s still 7.7 years since I bought my first house… Expansion of public housing by the government does not reduce the required period
Last year, it was found that salaried workers had to save 10.1 years without spending a single penny to buy their own house in the metropolitan area. Due to soaring house prices, the period to collect income has increased by two years in one year.
According to the ‘2021 Housing Survey Results’ announced by the Ministry of Land, Infrastructure and Transport on the 21st, the ‘Price Income Ratio (PIR)’, which indicates the cost burden when purchasing a house, was 10.1 times (median basis) in the metropolitan area last year, compared to the previous year. (8.0 times). The national average also rose from 5.5 to 6.7 over the same period. PIR is a measure of the amount of time it takes to buy a house without spending a single penny. Seoul’s PIR expanded from 12.5 times in 2020 to 14.1 times in 2021.
Last year, the nationwide homeownership rate was 60.6%, the same as the previous year. After peaking at 61.2% in 2019, the nationwide home ownership rate fell to 60.6% for two consecutive years from 2020 to 2021.
It took me 7.7 years to buy my first house, the same as the previous year. After increasing to 8.5 years in 2010, it decreased to 6.7 years (2016), but from 2020 it recorded 7.7 years for two consecutive years. Although the government is expanding the sale of public housing for young people and newlyweds, the time it takes to buy the first house in their lives has not been reduced due to the increased house price burden.
The rent burden of tenants has actually decreased. The prediction that the tenant’s rent burden would increase further following the Moon Jae-in administration’s revision of the ‘Lease 3 Act’ was wrong. Last year, the rent income ratio (RIR) of rental households was 15.7% (median) nationwide, down 0.9% from the previous year (16.6%). The higher the RIR, the greater the housing cost burden. An RIR of 15.7% means that if you receive a monthly salary of 1 million won, you will pay 157,000 won in rent.
After peaking at 20.3% in 2014, the RIR declined to 15.5% in 2018, but rose for two consecutive years to 16.1% in 2019 and 16.6% in 2020, before the rise last year stopped. In particular, last year’s RIR in the metropolitan area was 17.8%, the lowest figure since 2006, when the related investigation began. The RIR in metropolitan cities decreased from 15.1% in 2020 to 14.4% last year, and in the provinces from 12.7% to 12.6%. However, Seoul’s RIR increased from 21.3% in 2020 to 21.6% last year.
Housing insecurity among the young generation has intensified. The percentage of households that do not meet the minimum housing standard for young households was 7.9%, higher than that of general households (4.5%). Most (81.6%) lived in rental housing, and detached houses accounted for the most with 37.5%. In the case of large cities such as the Seoul metropolitan area, households living in poor conditions such as jjokbang and goshiwon are also included in the detached house type. Among newlywed households, the proportion of households that do not meet the minimum housing standard was 2.4%, which is lower than that of general households, but the average number of household members is high, so the residential area per person is narrow at 27.5㎡.
The survey was commissioned by the Ministry of Land, Infrastructure and Transport and the Korea Research Institute for Human Settlements and conducted through one-on-one individual interviews with 51,000 households nationwide between August 2021 and January 2022.