Dr. Scott Shepherd is a British-American academic. He received his Ph.D. from the University of London on the text and performance of Hamlet, and has taught in universities in the U.K. and Korea.
A home of one's own
Apartment buildings in Seoul / Yonhap
By Scott Shepherd
By Scott Shepherd
Housing is something that we all need, like food or water or clothing; society has a fundamental problem if the price of a home is high. This is a belief I have firmly held for years, ever since an economist friend pointed it out several years ago.
President Moon Jae-in seems to think so too. He has faced intense criticism for his measures intended to curb the ever-increasing price of housing in Korea. Despite all the effort and political maneuvering, his various schemes have failed.
I don't want to boast, but last week I bought a house. Well, not an actual house ― the few houses in Seoul are reserved for the very top echelons of society: the politicians, the tycoons, and the unfathomably rich owners and heirs of conglomerates. Mere humans can usually only afford to buy apartments, villas or officetels.
For those unfamiliar with the Korean system, by the way, a villa here does not live up to the image the name conjures of a luxurious country house replete with pool; imagine instead that an apartment building and a house had a four-story-tall baby. And if you know what the ugly portmanteau “officetel” means, just picture a cheaper version of an apartment complex which may also contain offices and shops on the lower floors.
So to be more precise, last week I bought a home in an officetel way outside of Seoul itself but nicely connected to the city ― though I'd like to point out that it's a rather nice new-build. It's taken years to save up enough for a deposit. I've worked three or four jobs at the same time, moonlighted, scrimped and saved, and here we finally are: my first step on the property ladder.
I think the act of buying a house has changed something about me. Before I bought it, I clung to the maxim that affordable housing was inherently a desirable thing. Who wants to spend huge chunks of their monthly salary paying for somewhere to sleep? I rooted for Moon and policies, hoped they would work and was dismayed by the reports that indicated to the contrary.
But now I have a good reason to hope that house prices ― or at least one specific house price ― will soar beyond all imagination. This mortgage might last the rest of my working life, so however much I theoretically believe that housing should be affordable for all, really I'd like my home to get much more valuable, please.
I'm not the only one. Homeowners are invariably richer than their counterparts who pay rent. They are older, more successful, more powerful, better educated. Almost by definition, the elite of any society are homeowners; the word landlord has a feudal ring to it for a reason. By contrast, the disenfranchised and poor, the weak and the alien will seriously struggle to save up a deposit and get a mortgage. It's not impossible, of course, but it's far from easy.
This power balance is, I suppose, a natural product of how society works. I'm not sure it's necessarily wrong in itself ― but the fact remains that almost all policy-makers have strong incentives to see house prices go up. How many national politicians live in rented accommodation out of financial necessity rather than as a political game?
It's not just lawmakers who have an impact; it goes down to the level of the individual. I'm certainly not willing to sell my new home at a loss. And if we appeal to the supply side, construction companies need to make a profit. If they couldn't make money, they simply wouldn't build any more ― they literally wouldn't be able to afford to ― and house prices would continue to rise.
Surely this is no-one's fault and there's no point playing the blame game. But can it be possible for the real value of houses to rise eternally? Could it really be the case that in ten or twenty or fifty years, the price of a tiny cell on the outskirts of Seoul or Busan would be worth more than what a person could earn in an entire lifetime?
Short of some kind of authoritarian state intervention, I can't see an alternative to ever-rising prices. Of course, some natural catastrophe or a devastating war with our neighbors to the North would do it. In the longer run, so too could Korea's low birthrate ― though government policies and immigration seem likely to stem the population decline for a while to come at least. Any of these potential “solutions,” however, would obviously have awful consequences far worse than the problem of high house prices.
Maybe the pandemic is the awful shock that will change the system. Perhaps with the rise in remote working, people will naturally start to drift away from the cities. This is unlikely, not least because Korean companies seem less keen on the idea of working from home.
I don't know the answer. For the good of society I do sincerely hope that a solution can be found and that the continued rise in house prices will be slowed ― just not mine.
Dr. Scott Shepherd is a British-American academic. He has taught in universities in the U.K. and Korea, and is currently assistant professor of English at Chongshin University in Seoul. The views expressed in the article are the author's own and do not reflect the editorial direction of The Korea Times.