‘Real estate concentration and disparity deepening’ in 4 years of the Wen government…尹 Government’s ‘young-chul’ concerns deepening

During the four years of the Moon Jae-in administration (2018-2021), the phenomenon of real estate concentration intensified and the wealth gap widened. Meanwhile, the real estate market, which had barely stalled at the end of the current administration, is showing an upward movement due to expectations such as deregulation ahead of the official inauguration of President-elect Yoon Seok-yeol, who has announced that he will overturn all real estate policies of the current government. As the ‘real estate invincibility’ continues, there is a possibility that the ‘real estate investment’ of the 2030 generation will intensify.

Real estate concentration and wealth gap widening during the four years of the Wen government

According to Shinhan Bank’s ‘2022 Financial Life Report for Ordinary People’ released on the 5th (targeted for 10,000 economically active people aged 20 to 64), last year, the average wealth held by Korean households exceeded 500 million won for the first time. The average household wealth in 2021 was 517.92 million won in 2021, an increase of 798.83 million won from 2020. The reason for this large increase in average assets was the concentration of real estate and the sharp rise in prices.

Real estate, which accounts for the largest proportion of total assets, has increased over the past four years and increased to 79.9% in 2021, while the proportion of financial assets and other real assets decreased to 13.8% and 6.3%, respectively. The proportion of real estate assets has grown for four consecutive years, reaching 75.9% in 2018, 76.0% in 2019, and 78.0% in 2020. The report explained, “As real estate prices continue to rise, the concentration of real estate assets appears to have intensified.”

Due to the rise in real estate prices, the wealth gap by income group has widened further over the past four years. In the first category of household income (lowest 20%), the average amount of assets held last year was 122.54 million won, an increase of 19.13 million won from the previous year. Millions of dollars were the largest increase. It was found that the total assets of all households in the middle and high-income brackets 3 to 5 increased by more than 100 million won compared to the previous year.

Income polarization between the high and low income groups has also deepened. Income in Section 1 has steadily decreased since 2020, when the novel coronavirus infection (COVID-19) occurred, but income in Section 5 decreased by 70,000 won in 2020 and increased significantly to 530,000 won last year. From 2018 to 2020, the income gap between sections 1 and 5 maintained a level of 4.8 times, but in 2021 it increased to 5.23 times.

◆’Real estate invincible’ continues in 2030

The number of people in their 20s and 30s buying a house in the ‘young-chul’ family is also on the rise. The percentage of households in their 20s and 30s who purchased a house in the past year was 7.2%, up 1 percentage point from the previous year. 84.1% of the houses purchased were apartments. 89.8% of the 2030 households who purchased a house used loans, which is an increase of 14.7 percentage points from the previous year. This is about 10 percentage points higher than the loan use rate of all age groups (79.1%).

Interest burden on debt is inevitable. The report said, “The 20-64-year-olds who have purchased a house within the past year spend an average of 740,000 won a month on debt repayment, but the 2030 generation spends 60,000 won more than that due to a large loan amount, so it may be burdensome to repay the debt. “Assuming that they repay 800,000 won a month as it is now, the 2030 generation will have to pay off their debts over the next 17 years.” “Despite the burden of debt repayment, the value of the purchased house has risen rapidly, and as of 2021, it has risen by 32.8% compared to 2020 to exceed KRW 500 million.” showed a larger increase in the

In the future, it is predicted that the loan use rate of the younger generation will increase further. 56.9% of those in their 20s and 30s answered yes to their intention to purchase a house in the future, which was higher than the average of all age groups (53.9%). For home purchase funds, 59.2% of those in their 20s and 30s said they would use a loan.

Home prices are preparing to rise ahead of the 尹 government

President-elect Yoon Seok-yeol has already foretold a major change in real estate policy even before the election. While the Moon administration mainly implemented a policy of curbing demand instead of supply, the Yoon administration is promoting a policy of expanding supply while repairing excessive regulations and irrational taxation.

Even before the new government was launched, house prices are booming in some areas, including the Gangnam area of ​​Seoul, in anticipation of deregulation. Even if this is not the case, the real estate investment fever of the 2030 generation, who are highly willing to invest in real estate, may become even hotter.

According to the ‘Status of Apartment Transactions in Seoul Immediately after the Election (March 10 – 28)’ submitted by the Korea Real Estate Agency on the 5th, by Kim Hoe-jae, a member of the Democratic Party of Korea, there were 46 transactions in which house prices rose from the previous high immediately after the election. As a result of the survey, the rate of increase in house prices in all 149 cases was 30.9%, of which the average house price of the top 10 houses rose by 686 million won from 2.533 billion won to 3,219 million won.

In particular, it is analyzed that Gangnam and Seocho apartments with reconstruction complexes are leading the rise in house prices, and the next government’s reconstruction regulations and easing of the multi-family ownership tax are affecting house prices.

As a major change in real estate policy is foretold, civic groups are raising concerns. The Citizens’ Coalition for Economic Justice (Gyeongsilyeon) held a press conference in front of the Transition Committee in Tongui-dong, Jongno-gu, Seoul on the 6th and urged the next government to immediately abolish the policy that favors chaebols and encourages real estate speculation. They cite policies such as exemption from safety examination for apartment reconstruction for 30 years, easing of the system for recovering excess profits from reconstruction, a full review of the lease law, and allotment of private rental housing on public housing sites. expected,” he said.

[ⓒ 세계일보 & Segye.com, 무단전재 및 재배포 금지]