Middle-Aged and Older South Koreans Burdened by Debt...Debt Soars 8.9% While Income Rises 3.3%

Statistics Korea 2019 Administrative Statistics on Middle-Aged and Older Adults
42.6% Own Housing, 56.3% Have Debt in Financial Sector
75.6% Have Income... Average 35.55 Million KRW

[Sejong=Asia Economy Reporter Kim Hyunjung] More than half of middle-aged adults aged 40 to 64 in South Korea were found to have debt with financial institutions. The debt of homeowners was nearly four times that of non-homeowners, indicating that loans were taken out during the home purchase process. Slightly more than 4 out of 10 middle-aged adults owned a home in their name, and about 25% of the entire middle-aged population were found to have no income.

Middle-aged adults with income earned an average annual income of 35.55 million KRW, a 3.3% increase from the previous year, which is less than half the growth rate of the median loan balance (48.56 million KRW), which increased by 8.9%.

◆42.6% of middle-aged adults own homes... Slight increase from last year= According to the '2019 Middle-aged Population Administrative Statistics' released by Statistics Korea on the 22nd, among the total middle-aged population (19.979 million) last year, 8.51 million (42.6%) owned homes, marking a 0.6 percentage point increase from the previous year. The survey was conducted by Statistics Korea as of November 1 last year, targeting the population aged 40 to 64 (born between 1954 and 1979).

The proportion of homeowners tended to increase with age. It was 39.0% in the early 40s, 41.8% in the late 40s, and 42.9% in the early 50s, while the baby boomer generation in the late 50s and early 60s recorded 44.1% and 45.2%, respectively.

By employment status, non-wage workers had a higher homeownership rate at 50.9% compared to wage workers at 47.1%. By gender, 45.6% of men and 39.6% of women owned homes. When a couple lived together in a home registered under one spouse's name, the other spouse was counted as a non-homeowner.

Based on the official property price in January this year, 34.0% of homeowners owned homes valued between 60 million KRW and 150 million KRW. Those owning homes valued between 150 million KRW and 300 million KRW accounted for 28.5%, followed by 6.5% of middle-aged homeowners owning homes valued over 600 million KRW. The proportion of homeowners with homes valued over 600 million KRW increased with age.

◆56.3% have debt with financial institutions... Median 48.56 million KRW= The proportion of middle-aged adults with outstanding loans from financial institutions, in other words, those with 'debt,' was 56.3%, a 0.2 percentage point increase from the previous year. Among loan balance ranges, 22.0% had between 10 million KRW and less than 30 million KRW, the largest group, followed by 16.9% with between 20 million KRW and less than 20 million KRW. The median loan balance was 48.56 million KRW, an 8.9% increase from 44.59 million KRW the previous year.

By gender, the median loan balance for men was 56.33 million KRW, 1.5 times that of women at 38.20 million KRW. By age, those in their early 40s had the highest median loan balance at 54.20 million KRW, with the median decreasing as age increased.

The median loan balance for registered employed persons was 58.04 million KRW, 2.1 times that of unemployed (unregistered) persons at 27.09 million KRW. The median loan balance for non-wage workers was 83.14 million KRW, 1.7 times higher than wage workers at 50 million KRW. The median loan balance for homeowners was 92.60 million KRW, 3.9 times higher than for non-homeowners at 24 million KRW. This suggests that many took on debt to purchase homes.

◆Income grows slower than debt... Average 35.55 million KRW= Last year, the average personal income earned through work by middle-aged adults was 35.55 million KRW, a 3.3% increase from 34.41 million KRW the previous year. This is less than half the growth rate of the median loan balance (8.9%).

The proportion of middle-aged adults with income was 75.6% (15.101 million), a 1.4% increase from the previous year. Among income brackets, 33.0% earned between 10 million KRW and less than 30 million KRW, the largest group, while those earning less than 10 million KRW accounted for 27.4%.

By gender, men earned 46.05 million KRW, twice as much as women at 22.50 million KRW. By age, those in their late 40s earned the most at 39.38 million KRW, with income decreasing as age increased from the early 50s onward. Those combining wage and non-wage work had the highest average income at 46.37 million KRW, and wage workers earned 1.5 times more (44.05 million KRW) than non-wage workers (28.79 million KRW). Homeowners had an average income of 44.64 million KRW, 1.6 times higher than non-homeowners at 27.92 million KRW.