Home Ownership in Seoul Remains Distant Dream for Most

It takes middle-income workers an average of eight years and eight months to buy their first home in Seoul if they save all of their income, according to a recent report. In sharp contrast, in South Jeolla Province it takes them just a year and 10 months.

According to the Korea Housing Finance Corporation on Tuesday, the median price-to-income ratio (MPIR) for housing prices stood at 4.37 as of the end of March, down 0.08 point from the end of last year.

This means that the national median housing price is 4.37 times higher than the average middle-income urban worker’s annual wage. In other words, if a middle-income worker saves all his income, it takes four years and four months to buy a mid-priced home -- about 10 months longer than in the U.S. or Japan, where it takes three years and six months.

But in Seoul the time went down by five months since the end of last year as a result of a drop in housing prices.

In nearby Gyeonggi Province and Incheon, the time it takes for middle-income earners to buy their first home is five years and four months and four years and eight months, down three months from the previous period. But in Busan, where it takes four years and six months, and in South Gyeongsang Province, where it takes three years and five months, the period increased by three months.

North Gyeongsang and South Jeolla provinces have the most affordable housing with a year and 11 months and a year and 10 months. In Gangwon Province the period is two years and a month and in Jeju two years and nine months.

The MPIR rose from 3.76 at the end of the first quarter of 2006 to 4.53 at the end of the second quarter last year but has now fallen to about 4.3-4.45. This seems to be the result of stagnant housing prices combined with a slight rise in the median household income of urban workers.

The KHFC publishes MPIR data every three months based on Statistics Korea data on the median household income of urban workers and a Kookmin Bank survey of fluctuation in apartment prices.

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