Seoul Apartments Cost over 10 Times Average Income

  • By Kim Shin-young

    June 11, 2021 13:18

    Apartment prices in Seoul have risen to more than 10 times the average annual household income.

    Incomes have not increased significantly but real estate prices have surged, so the price-to-income ratio (PIR) which stood at 7.1 times when President Moon Jae-in took office, has risen to 10.4.

    According to the Bank of Korea on Thursday, PIR in the Seoul metropolitan surpassed the previous high of 8.6 times seen in the fourth quarter of 2007, just before the global financial crisis.

    /Yonhap

    Apartment prices are also rising sharply outside the capital, where PIR had fallen since 2017, but rose sharply again last year to a record 4.9 times.

    That alone would be bad enough, but the government has also made it more difficult to get home loans in its frantic efforts to tame speculation. Banks can lend no more than 40 percent of any home price over W600 million, which is way below the average price in Seoul (US$1=W1,116).

    Meanwhile, the ratio of Korea's household debt to GDP rose from 92 percent at the end of 2018 to 104 percent late last year.

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