Lee Hyo-jin covers the Bank of Korea, the banking industry and broader financial news. Her previous beats include foreign affairs, North Korea and general reporting on Korean society.
Young Koreans lose trust in Lee government's economic policies
A residential neighborhood is seen from above from Lotte World Tower in Songpa District, Seoul, Thursday. Yonhap
By Lee Hyo-jin
Housing, investment policies seen as out of touch with young people's needs
A 33-year-old office worker in northeastern Seoul's Dongdaemun District surnamed Park has been using an individual savings account (ISA) for long-term investments, mainly in overseas stocks. But uncertainty over recent changes to the account has left her unsure about how to manage her money.
"I saw reports in early August saying the rules would change to limit investment in overseas stocks, and then I saw that the plan was being reconsidered. It’s confusing to keep up with the news," she said.
"The problem is not just about the changing rules, but that it is becoming harder to make long-term financial plans when policy directions shift so quickly."
Another office worker in her 30s, surnamed Lee, said she felt frustrated by the government's housing policies.
"Several housing policies have been announced recently, but none of them have really helped me. My goal is to buy an apartment within five years, but loan restrictions make that goal feel out of reach," Lee said.
Their frustration reflects a broader sentiment among some young Koreans that government policies meant to help them save, invest money and buy homes are instead adding to their uncertainty.
In recent months, the Lee Jae Myung administration has rolled out a series of policies targeting young people's housing, savings and investments. But some of those measures have drawn criticism from them.
President Lee Jae Myung speaks during a Cabinet meeting at Cheong Wa Dae in Seoul, Tuesday. Joint Press Corps
The latest example is the Youth Future Bogeumjari Loan, a new government-backed mortgage program announced last Thursday for first-time buyers aged 39 or younger. It allows borrowers to receive loans covering up to 80 percent of the value of a home, which can include a house, officetel or low-rise apartment flat, but not high-rise apartment complexes, priced up to 400 million won ($280,000).
The government says the program gives young people a way to enter the housing market, allowing them to buy a different kind of home first, and eventually move into a high-rise apartment complex.
But that approach may not reflect what young buyers actually want. A Korea Research Institute for Human Settlements report published in March found that 79.7 percent of young households preferred a high-rise apartment building as their first home.
That preference is also reflected in borrowing data. Of the 19 trillion won in Bogeumjari Loans, a government-backed mortgage program, disbursed in 2025, 12 trillion won went to borrowers aged 39 and under. About 11.6 trillion won, or 97 percent of that amount, was used to purchase units in high-rise apartment complexes, according to the Financial Services Commission.
The figures raise concerns that young buyers could end up taking on the risks of a property they later need to sell before buying an apartment. If the initial property is difficult to sell, it could pose a hurdle to moving into a new apartment building.
The frustration among young people extends beyond housing.
The government's proposed overhaul of ISAs unveiled earlier this month was sent back for review just days later after drawing criticism.
The plan centered on launching a new productive finance ISA, while shortening the maturity of existing accounts and scrapping the ability to carry unused annual contribution limits into subsequent years.
Under the current system, investors can effectively extend the maturity of their accounts indefinitely, allowing them to keep their investments growing over the long term while deferring taxes. The proposed changes would eliminate that flexibility.
The new ISA would also have excluded Korea-listed exchange-traded funds tracking overseas indexes such as the S&P 500 and Nasdaq 100.
The proposed changes drew strong opposition, particularly from younger investors with limited disposable income, prompting the president to order a review of the policy.
Growing frustration over the government's economic and housing policies is being cited as a main reason younger voters are turning away from Lee.
According to a Realmeter poll released Monday, the president's approval rating fell for a fifth consecutive week to a new low of 43 percent. In a Gallup Korea poll released last week, support among people in their 20s stood at 30 percent, while it was 37 percent among those in their 30s.