[The Editors' Verdict] The Modern Caste System Created by 'Homes': What Is Your Class?

Jangwook Cho, Head of Construction and Real Estate Department

Won Hee-ryong, the first Minister of Land, Infrastructure and Transport under the Yoon Seok-yeol administration, stated in his inauguration speech on the 16th, "We will break down the 'modern housing caste system' where a house determines one's social status." He also emphasized this goal during his first field communication with young people on the 24th after taking office, saying, "The goal is to dismantle the modern housing caste system." This officially acknowledges that the current social class is divided into 'those who own houses' and 'those who do not.'

Such distinctions have existed in the past, but recently they have become more segmented. Unlike before, when class was divided solely based on homeownership, the focus has shifted to price. Recall the end of 2019 when the '12.16 Real Estate Measures,' regarded as the strongest ever, were announced. On that day, a post appeared on a real estate community stating, "Due to this measure, the real estate market has been divided into four grades," accompanied by a critical image saying, "India's caste system has been introduced to Korea." This satire, named the 'New Caste System,' compared those owning homes worth over 1.5 billion KRW to Brahmins (priests), those with homes between 900 million and 1.5 billion KRW to Kshatriyas (nobles), homes under 900 million KRW to Vaishyas (commoners), and the homeless to Shudras (serfs). It mocked how real estate has become a means to reveal capitalist social status as a personal residence. Nowadays, it is also expressed using old social classes such as △royal family △king’s family △central aristocrats △local gentry △middle class △commoners △serfs △livestock.

Turning back to the present, based on KB Real Estate prices, the average apartment sale price in Seoul this month has exceeded 1.3 billion KRW. Since the Moon Jae-in administration began in June 2017, the average apartment price in Seoul has more than doubled from 640 million KRW over five years. In particular, the average apartment price in Gangnam-gu reached 2.6 billion KRW, which is 1.31 billion KRW higher than the 1.29 billion KRW at the start of the Moon administration. This means that Gangnam apartment prices have increased by 200 to 300 million KRW annually over the past five years. Owners of Gangnam apartments have quietly earned 200 million KRW per year, totaling 1 billion KRW over five years, just by holding their properties.

In the early 2000s, there was a craze called 'Ten in Ten,' meaning 'making 1 billion KRW within 10 years.' Salary workers dreamed of escaping their humble origins by diligently saving money, subscribing to installment savings, studying stocks, and engaging in small-scale financial investments. The hope was that with about 1 billion KRW, they could purchase a 'smart home' and live a life envied by others. However, the abnormal rise in housing prices over the past five years has crushed such dreams.

The previous government labeled multi-homeowners as speculators and insisted that the government must control all markets. In contrast, Minister Won acknowledged that it is a natural desire for ordinary people to own their homes and for the middle class to improve their housing conditions. He also pledged not to pursue reckless policies that destabilize the market in an attempt to curb housing prices, as seen in the previous administration. He took former Minister Kim Hyun-mi’s case as a cautionary example. Despite more than 20 official real estate measures, both sale and rental prices soared significantly, becoming a major reason for the regime change after five years. History has repeatedly shown that forcibly suppressing market demand will eventually cause prices to rebound. Hopefully, as Minister Won is determined, situations where people despair due to a fixed housing caste system they are unaware of will no longer occur.