H. Yoo
Research expert covering South Korea
Millennial homeownership in South Korea - statistics & facts
In South Korea, millennials currently make up a significant share of mortgage loan seekers. Born between the early '80s and late '90s, millennials have entered their prime working years. Despite having faced the '08 financial crisis and the struggles of the pandemic, this demographic has established itself within the job market in the last decade. With this newly acquired financial leverage, many millennials in Korea are now seeking to secure a home for various reasons, such as investment purposes, housing their growing families, and living independently.
Important factors for purchasing a home
As most millennials are still far from retirement, many seek to move somewhere close to work, likely in the city, and with as little commuting as possible. They are also the generation most likely to bear children, making areas known for good schools and ample public facilities such as daycare centers and parks most attractive. However, the cultural pressure of taking care of one’s elders within South Korean families may push young adults to remain in the same city or province despite moving out to stay close to their parents and grandparents.Financial state of millennial homeownership
Although millennial homeownership has seen growth, the rate of those who own homes among millennials is still lower compared to that of their baby boomer counterparts. Even with a loan, financing a new house in the city now seems nearly impossible compared to a couple of decades ago for middle-income households. Knowing this and facing unprecedentedly low rates of fertility, the Korean government has encouraged the creation of new families via special loans, called bogeumjari loans. These are favorable government loans with low interest rates, and their primary target is young couples looking to purchase a house for the first time. This has given young millennials a strong advantage in the real estate market, but whether this is sufficient is yet to be seen. Growing household debt, living expenses, and negative market influences on interest rates all pose looming questions on the future of secure homeownership for this generation and beyond.
