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Aging population to drive down Korea's housing prices from 2040: experts

April 23, 2024 - 18:09 By Shim Woo-hyun
Hanmi Global Chairman Kim Jong-hoon (third from left), Korean Peninsula Population Institute for Future Chairman Chung Un-chan (fourth from left), Tokyo City University Professor Uto Masaaki (fifth from left) and other participants pose for a photo at a seminar organized by Hanmi Global at Posco Center in southern Seoul, Tuesday. (Hanmi Global)

South Korea's housing prices are expected to see a long-term decline starting in 2040, hit by the nation’s falling birth rate and quickly aging society, according to experts who joined a Seoul seminar hosted by construction project management firm Hanmi Global on Tuesday.

"In 2025, South Korea will become a superaging society with an over-65 population surpassing 10 million, which will account for more than 20 percent of the country's total population. Due to the aging population and overall decline in its population, the country will face unprecedented challenges," said Hanmi Global Chairman Kim Jong-hoon during the event.

During the seminar, experts from Korea and Japan shared their insights into the current slowdown in the real estate market, especially from demographic perspectives.

Lee Yong-man, a real estate professor at Hansung University, said, “As the number of single-person households increases, the number of Korea’s total households will also increase until 2039, peaking at 23.9 million. However, the demand for housing units will also peak in 2040 and decrease afterward.”

According to Lee, the number of empty housing units will rapidly increase by 2040, and around 13 percent of housing units available in the market will be empty in 2050. He added that the drop in housing prices will take place at a faster speed outside of Seoul.

According to Uto Masaaki, an urban life studies professor at Tokyo City University, Japan is experiencing a similar situation.

"In the case of Japan, the combined value of real estate assets in Tokyo is expected to drop by 30 percent by 2045, or 94 trillion Japanese yen," Uto said. The professor added that decreases in housing prices will occur much faster in regions that are farther from Seoul and require longer commutes.

The professor advised that policies focus on trimming the Greater Seoul area, rather than expanding satellite cities, to protect the real estate market.