For the First Time, Apartment Purchases by People in Their 30s Surpass Those in Their 40s

30s Account for 29,079 Sales... Surpassing 40s with 28,824 Sales
First Time Since Statistics Began That 30s Outnumber 40s
Experts: "With Continued House Price Increases and Growing Jeonse/Monthly Rent Instability, Hurry to Secure Your Own Home"

[Asia Economy Reporter Onyu Lim] A(32), an office worker planning to get married this October, purchased an apartment worth around 700 million KRW in Sujeong-gu, Seongnam, Gyeonggi Province at the end of last year. Initially, he planned to find a newlywed home through a jeonse lease in Seongdong-gu, Seoul, but changed his mind due to soaring housing prices. In the process, he took out the maximum possible loan and also received help from both sets of parents. A said, "If not now, it will be even harder to buy a house, and I was worried about moving every two years due to rising jeonse prices, so I decided to purchase a home."

The fervor for apartment purchases among people in their 30s shows no signs of calming down. In December last year, for the first time, the number of apartment purchases by people in their 30s exceeded those by people in their 40s.

According to the Korea Real Estate Board on the 27th, the total number of apartment sales transactions nationwide in December last year was 106,207, the highest monthly volume of the year. In particular, purchases by people in their 30s recorded 29,079 transactions, surpassing those by people in their 40s (28,824 transactions). This is the first time since age group statistics began in January 2019 that people in their 30s bought more apartments than those in their 40s.

The regions where the number of purchases by people in their 30s exceeded those by people in their 40s included Seoul, Gyeonggi, Incheon, Daejeon, Ulsan, and Chungbuk. These areas mostly had high housing prices or steep price increases. Daejeon, Gyeonggi, Ulsan, and Incheon ranked 2nd to 5th in housing price increase rates last year.

[Image source=Yonhap News]

Experts cite the ongoing rise in housing prices and intensified housing insecurity due to the jeonse shortage as reasons why the buying enthusiasm of people in their 30s has spread from Seoul to the metropolitan area and large provincial cities.

In fact, the cumulative increase rate of apartment sale prices last year was 7.57%, the highest since 2011 (8.19%). Amid soaring housing prices, the perception that "real estate is the best investment" is spreading among young people. Kim Hak-ryeol, head of SmartTube Real Estate Research Institute, explained, "Apartment purchases by people in their 30s cannot be seen simply as ‘panic buying.’ It is a ‘smart buying’ where economically capable young people make wise choices quickly."

The nationwide jeonse shortage, which spread after the new lease laws such as the contract renewal request system and the rent ceiling system were implemented in July last year, is also fueling apartment purchases by people in their 30s. The cumulative increase rate of apartment jeonse prices last year was 7.32%, the highest since 2011 (15.38%). Kim Deok-rye, senior researcher at the Korea Housing Institute, explained, "Only ten years ago, there was a widespread perception among young people not to buy houses. However, recently, due to the shortage of jeonse and monthly rental listings, the willingness of people in their 30s to purchase homes for housing stability has become higher than ever."

With the government’s strong regulations on multi-homeowners narrowing the options for single-homeowners, there are forecasts that people in their 30s will purchase more apartments than those in their 40s in the future. Kim said, "Due to loan regulations and occupancy requirements, it is becoming increasingly difficult for people in their 40s, who mostly already own homes, to buy additional houses, whereas people in their 30s, many of whom are non-homeowners, are in a freer situation."