HanmiGlobal and Korean Peninsula Future Population Institute Seminar
Amid the trends of low birth rates and aging population, it is forecasted that domestic housing prices will begin to decline starting from 2040. In particular, Japan, which is seen as a reflection of Korea's future, is predicted to experience a loss of over 840 trillion won in total housing value in the Tokyo metropolitan area by 2045, highlighting the urgent need for Korea to prepare countermeasures for the real estate market.
On the 23rd, attendees are taking a commemorative photo at the seminar titled "The New Real Estate Market Brought by Changes in Population Structure: Crisis or Opportunity," hosted by HanmiGlobal and the Korean Peninsula Future Population Research Institute at the POSCO Center in Gangnam-gu, Seoul. / Photo by HanmiGlobal
On the 23rd, HanmiGlobal and the Korean Peninsula Future Population Research Institute held a seminar titled "The New Real Estate Market Brought by Changes in Population Structure: Crisis or Opportunity?" at the POSCO Center Art Hall in Gangnam-gu, Seoul. The event was organized to compare and analyze the real estate markets of Korea and Japan and to explore effective responses to changes in population structure.
Professor Lee Yong-man of Hansung University’s Department of Real Estate, who presented the main topic, stated, "Despite the natural decline in population, the increase in single-person households will cause the total number of households in Korea to peak at 23.87 million in 2039." He added, "However, total housing demand is also expected to peak around 2040, after which housing prices are anticipated to enter a downward trend."
He further explained, "The timing of the peak in total housing demand varies by region; in the metropolitan area, the decline in housing prices may be somewhat delayed, but in provincial areas, the downward trend is likely to appear earlier." He also predicted a sharp increase in vacant houses after 2040, diagnosing that by 2050, about 13% of the total housing stock could become vacant.
Professor Lee emphasized the need for housing liquidity during the phase of declining housing demand. He suggested that tax benefits encouraging 'housing downsizing,' where elderly households move to smaller units, could resolve 'mismatches' in housing between generations and household sizes. He elaborated that converting the difference into pensions could secure stable retirement income.
He also recommended accelerating the regeneration of aging housing stock, noting that urban redevelopment takes a long time but there is limited time left before total housing demand decreases. To alleviate housing insecurity among young people, which could discourage marriage and childbirth, he advocated for the activation of the private rental housing market as a policy measure.
On the 23rd, at the POSCO Center in Gangnam-gu, Seoul, panelists are discussing "The Impact of Demographic Changes on the Real Estate Market and Countermeasures" at a seminar hosted by HanmiGlobal and the Korean Peninsula Future Population Research Institute. / Photo by Noh Kyung-jo
Before Professor Lee’s presentation, the current situation in Japan, which has already experienced low birth rates and aging, was examined. Japan’s population peaked at 128 million in 2010 and has been declining since. Professor Masaki Uto of Tokyo City University’s Department of Urban Life Studies stated, "Population decline has the greatest impact on the housing market, followed by the office market," and emphasized the need for 'compact cities' that develop existing urban centers at high density.
Professor Uto predicted, "By 2045, the value of housing assets in the Tokyo metropolitan area will fall by 30% compared to 2019, resulting in a loss of 94 trillion yen (approximately 840 trillion won). Korea will face similar problems as Japan." He expressed concern that while high-priced properties in city centers remain stable, provincial areas will not, and elderly residents living outside the city center will face asset reduction due to falling housing prices, leading to insufficient funds for retirement.
He particularly noted that commuting time to the city center affects the degree of housing price decline, expecting areas with commutes over 60 minutes to experience steeper price drops. For example, by around 2045, housing prices in areas within a 30-minute commute from central Tokyo are expected to fall by 9.9% compared to 2018, while those with commutes over 60 minutes will drop by 29.8%. Areas with commutes over 90 minutes are estimated to decline by 48.2%, and those over 120 minutes by 54.7%.
As a countermeasure to this deflation in housing asset values, Professor Uto proposed compact cities. He analyzed that developing existing urban centers at high density is more advantageous for defending housing asset values and preparing for aging than building new towns far from the city center.
The seminar was attended by Kim Jong-hoon, Chairman of HanmiGlobal; Jung Un-chan, Director of the Korean Peninsula Future Population Research Institute; and Kim Seon-gyu, Chairman of Hoban Group. After the main presentations, a panel discussion was held with Kim Kyung-hwan, Honorary Professor of Economics at Sogang University, as the moderator, and participants including Kim Seung-bae, Chairman of the Korea Real Estate Development Association; Professor Kim Jun-hyung of Myongji University’s Department of Real Estate; and Park Jin-baek, Senior Research Fellow at the Korea Research Institute for Human Settlements, discussing the impact of population structure changes on the real estate market and possible countermeasures.
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