Most citizens are feeling despondency as they witness skyrocketing house prices in Seoul, especially the affluent Gangnam area. People who trusted the government’s words that it would assess the real estate price and postponed their purchase are said to be regretting. Not only is the dream of renters to purchase their own house is drifting away even more but also becoming a cause of family disputes as a couple would blame each other for selling house or not purchasing house.
Who in the world would become motivated when they think that some people earn 100 million won in just a few months while some can only save 10 million won or even less than 1 million won a year? Some even say that at least half of the Korean citizens are suffering “real estate depression.” Income-oriented growth is meaningless if earned income barely increases in front of unearned income of house price.
It order to purchase an average priced apartment (691.59 million won) in Seoul, a median monthly income of a family of four (4.25 million won) this year needs to save money for 12 years and 8 months, given that they do not spend any of their income. A domino is continuing where young people gives up purchasing a house and subsequently gives up dating, marriage, and childbirth. Older generations, who own a house in Seoul, are not necessarily happy either. They do not have the ability to pay taxes that rise along with the skyrocketing house prices as the they only possess one house without any income. They cannot even subscribe for housing reverse mortgage, being aware of their children, who are waiting to inherit their house.
Nevertheless, people who own houses in regions, look at people who own houses in Gangnam region with jealousy. The invincible real estate market in South Korea, which appeared to collapse as the house prices nosedived as a result of the 2008 global financial crisis, followed by low birth rate, is now recovering and burning like fire. The act of speculation where one devotes everything he or she has into houses, as they consider it as an invincible safe asset, threatens the sound development of macro economy.
Soaring house prices not only cause family discord but also become an element of social conflicts, going beyond social disharmony. The opposition party, in particular, should not use the government’s failure in real estate policy politically and come up with constructive measures through cooperation. In fact, the government does have some responsibility over the current rise in house prices as it used excessive real estate supporting policy, encouraging people to “get a loan and purchase a house” to boost the economy. The purpose of politics at the least is to make a society where people want to work. There is nothing more concerning than a growing number of citizens who are not motivated to work and strengthening psychology of speculation.