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Housing stock continues to grow quickly

Despite government’s efforts, many people have multiple homes
Nov 20,2019
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The number of people owning more than one home continues to grow despite government efforts to encourage the sale of these homes.

According to Statistics Korea, the total number of housing units, including apartments, rose 3 percent last year, from 17.1 million in 2017 to 17.6 million in 2018.

The number of housing units is outpacing natural demand, with the population only growing 0.07 percent to 49.98 million in 2018 and the number of households up only 1.6 percent to nearly 20 million.

Last year, individuals owning a home totaled 14 million, up 2.5 percent, while the number of people owning only one home was 11.8 million, which is up 2.3 percent.

The number of people with two or more homes totaled 2.19 million, which is up 3.4 percent.

The Moon Jae-in administration has been fighting the housing market since taking office in May 2017 by releasing measure after measure to control prices.

These include the tightening of housing loans, higher taxation and, most recently, the capping of preconstruction sale prices.

“People owning more than one apartment should sell those they are not living in,” Land Minister Kim Hyun-mee said during a press conference in 2018 after announcing the government real estate measures on Sept. 13.

One of the goals in encouraging the sale of excess property is to increase the supply of available housing and lower prices, thus making real estate more affordable.

Critics say that the tough measures won’t encourage those with extra homes to sell them and will only burden those who are most likely to be vulnerable.

“People with multiple apartments and profiting from rents or sales are the super rich that could afford the increased taxation,” said a real estate industry source, who requested anonymity.

“It is the little people that will feel the pinch of the higher taxes.”

The statistics agency argues that the growth in the number of people owning multiple homes is showing signs of slowing.

“While the number of people with multiple housing units has increased, the growth rate has actually declined from the previous year,” said Park Jin-woo, head of the agency’s administrative data management division.

A major concern is the plight of the elderly owning apartments.

Nearly 70 percent of people in their 60s to 80s own their own units. As they are generally on fixed incomes, they may have trouble paying the higher taxes.

According to the statistics agency, 44 percent of Koreans or 8.74 million still live in rented housing or housing secured with a jeonse long-term lease.

In Seoul, a 1.96 million, a full 50.9 percent, did not own their own homes, up from 1.93 million a year earlier.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]