November 24, 2020 08:46
Young people are still borrowing heavily to buy starter homes as the government makes it tougher and tougher to get them.
The proportion of people in their 20s and 30s among those who bought apartments in Seoul last month rose to a record. Apartment lease regulations were revised in late July with a view to bolstering the rights of tenants, only to result in a dire shortage of rental homes as landlords ostensibly moved in themselves to avoid extending disadvantageous contracts.
The government urged prospective home buyers to hold off, but young people who have come to distrust the real estate policies have gone on a panic-buying spree.
According to the Korea Appraisal Board on Nov. 20, Koreans in their 30s bought 1,663 apartments last month, accounting for 38.5 percent of total purchases. Their proportion has increased steadily since reaching 33.4 percent when the regulations kicked in.
Even people in their 20s are snapping up apartments. Last month, they accounted for 5.1 percent of total homebuyers. While overall transaction volume shrank, 20-somethings were the only age group that bought more homes.
The proportion of apartments in the metropolitan area owned by people in their 20s continues to rise by six percent in Gyeonggi Province and 7.6 percent in Incheon. By district, young people made relatively high proportions of purchases in affordable Seongdong (62 percent), Gangbuk (54.1 percent), Gangseo (53.3 percent) and Guro (52.8 percent).
The government's real-estate market curbs caused apartment sales volume to fall from 16,002 cases in July to 4,320 in October.
Koh Jong-wan at the Korea Asset Management Institute said, "At a time when overall sales volume has declined, more and more young people are buying apartments, because they're afraid that they may never get to own a home as prices keep rising sharply."
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