Saving 16 years' income can buy home in Seoul

By Choi Sung-jin

To buy a house in Seoul, an average Korean has to save all his or her income, besides taxes, for 16 years.

The Citizens’ Coalition for Economic Justice (CCEZ) said so Tuesday, based on its analysis of regional home prices and household income using data from the Korea Appraisal Board and Statistics Korea.

The coalition, a civic group pursuing a fair and just society, said of the 16 provinces and metropolises, it took longest to buy a home in the capital city. Following Seoul’s lead were Busan and Daegu (8.9 years each), Gyeonggi Province (8.5 years) and Incheon (8.1 years).

CCEZ compared regional household incomes and apartment prices and used the median value as its average figure. Ulsan, a southeastern city that houses Hyundai Motor and Hyundai Heavy Industries, recorded the highest household income of 51 million won ($45,940) a year while South Jeolla Province was lowest with 29.95 million won.

The national average household income was 38.6 million won, while average disposable income is reduced to about 30 million won after excluding non-consumption expenditure such as taxes and social insurance premiums.

Last month, the average apartment price was 260 million won, with flats in Seoul showing the highest price of 520 million won and those in South Jeolla the lowest at 100 million won.

“It is virtually impossible to save all of the household income except for taxes,” the CCEZ report said. “It will take several dozen years to buy a home with savings after excluding living costs, and a considerable number of families will unlikely be able to buy their own homes for life.”

Those who cannot afford to buy homes have to live with monthly rent or “jeonse” _ Korea’s unique rental system that requires tenants to deposit lump sums with their landlords instead of paying monthly rent. But rising jeonse prices are making even that difficult.

“To control the spiraling jeonse prices and ensure residential stability, the government is urged to put a ceiling on it while ensuring at least four to six years of a contract period in which homeowners cannot demand a rise in key money,” the report said.