Korea`s Housing Supply Rates Lower than Advanced Countries

Korean housing conditions still lag far behind advanced nations in quantitative and qualitative aspects. A study found that public rental apartment inventories and the rent to income ratio (RIR) in Korea fall short of not only those in advanced nations but also the global standards.

According to a study on `improvement housing supply` released by a research institute dealing with city housing policies in the Korean National Housing Corporation (KNHC), the number of houses possessed by every 1000 Koreans which represents Korea`s housing supply in quantity, stood at 249 as of the end of 2000 that is the half of the averaged figures in advanced nations, 446 houses per 1000 people. The Korea`s number also falls short of the world average, 280 houses per 1000.

In particular, the share of the public rental apartment in the total housing supply is 7.7 % that also lags far behind advanced nations (15.1%) and the global standards (22.0%).

Meanwhile, the number of new housing constructions stands at 10.8 houses per 1000 people that are much higher than advanced nations (6.4 houses) and the world`s average (6.9 houses).

The rate of housing inventory increase in Korea is 3.3 %, twice as much as advanced countries` 1.4%. In light of the fact, the housing supply shortage problem is expected to be resolved soon or later.

The quality of the Korean houses is also well below the global standard.

Korea`s Housing size in average and the number of rooms occupied by people, which are two leading indicators representing the quality of housing provisions, fall short of the average in advanced nations whose the averaged housing size is 63.1m2 and a room per 0.92 person.

In particular, the RIR, which shows the level of burden placed on the ordinary citizens, is 22.2%, much higher than advanced nations (18.0%)and the global standard (15.8%), suggesting the urgent need of the government measurers to stabilize monthly housing rental fees and the price of houses on a deposit basis.

A researcher from the KNHC` housing institute said, “in consideration of the global standards in terms of housing supply, Korea should increase the provision of houses in number and the government should come up with measures to provide institutional support for public rental apartment construction projects and the poor.

Jae-Seong Hwang jsonhng@donga.com