Seoul Apartments Cost over 10 Times Average Income
12 June, 2021
Apartment prices in Seoul have got risen to more than 10 times the common annual household income.
Incomes experience not increased drastically but real estate prices have surged, therefore the price-to-income ratio (PIR) which stood at 7.1 times when President Moon Jae-in took office, has increased to 10.4.
According to the Bank of Korea in Thursday, PIR in the Seoul metropolitan surpassed the previous most of 8.6 times observed in the fourth quarter of 2007, right before the global financial meltdown.
Apartment prices are actually also rising sharply beyond your capital, where PIR had fallen since 2017, but rose sharply again this past year to an archive 4.9 times.
That alone will be bad enough, however the government has also made it more difficult to go back home loans in its frantic efforts to tame speculation. Banks can lend only 40 percent of any home price over W600 million, which is normally 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 towards the end of 2018 to 104 percent late this past year.
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