[Walking Through Seoul] Seoul Housing Prices Block the Dream

Soaring Apartment Prices as a “Symbol of Success”
Asset Structure Driven by Real Estate Fuels the Rise
Housing Challenges for Young People Starting Families
Creating a Market Accessible to the Younger Generation

At the end of September, I visited Philadelphia. On the way there, I watched the forest of buildings in Manhattan, New York, pass by outside the window. Although I have visited several times and am quite familiar with it, I could not stop by this time. I arrived in Philadelphia after a 75-minute train ride. There was only one reason I skipped New York: the minimum cost for a one-night stay was $400. It was simply too expensive. For that amount, I could stay in Philadelphia for two nights. Other living expenses were also much lower. Despite this, there was plenty to see, the historic scenery was well maintained, and it was a great city for walking.

While staying in Philadelphia, I talked with local residents. The topic of New York always came up. Many people had moved from New York to Philadelphia, and they said the main reason was the lower cost of living. In particular, they emphasized the stark difference in housing prices. Upon hearing the details, the gap was shocking. The average apartment rent was nearly half, and the price of homes for sale was about one-fifth. Walking through Philadelphia's residential neighborhoods, I often saw families with children. There were also many schools. I was struck by the fact that so many young families with small children live in the city.

How can we relate the cases of New York and Philadelphia to Seoul? Neither of these two cities is a capital, nor do they have the overwhelming influence that Seoul has. Their historical backgrounds are also incomparable. However, as of October 2025, the cost of living issues in New York and Philadelphia share similarities with one of Seoul's chronic problems: the cost of housing and the challenges faced by people in their 30s who are starting families. In the bigger picture, the ability to afford housing in Seoul is a direct factor that determines whether Seoul can be a livable city now and in the future.

For people in their 20s, Seoul is not particularly expensive compared to other major cities around the world. There are many small and old studios or goshiwon units, but in terms of monthly rent alone, it is relatively affordable. Public transportation and safety are excellent, so there is little difference in which neighborhood you live in. Traditionally, there are many university students and young professionals from other regions, making Seoul a relatively comfortable city for people in their 20s. The main customer base of so-called "hot places," which frequently appear in the media and on social media, is also people in their 20s, and this is not unrelated to the city's demographic structure.

View of apartment complexes in downtown Seoul from Seoul Sky Observatory at Lotte World Tower, Songpa-gu, Seoul. Photo by Yonhap News Agency

In their 30s, people usually get married and start raising children. They can no longer live in a studio. They need a bigger home. This is where the range of choices becomes limited. Generally, affordable homes today are not suitable for comfortably raising a family. While it is possible to endure for a while, almost all young families in their 30s and 40s dream of moving to a larger, more comfortable apartment. Due to psychological expectations and the social image of being a "successful family," demand for apartments does not decrease.

However, these apartments are extremely expensive. Achieving that dream is far from easy. The most frequently cited statistic for understanding housing affordability is the price-to-income ratio (PIR), which measures how many years of income are needed to purchase a home. Comparing cities around the world shows how severe Seoul's housing affordability problem is. As of 2024, the ratio in Seoul is 13 years. You would need to save all your income for 13 years without spending a single cent to buy an apartment. Even notoriously expensive New York has a ratio of 10 years. In Philadelphia, it is about 4 years.

Although it is not an exact comparison, it is interesting to look at the typical price of a three-bedroom apartment in the heart of each city. In Gyonam-dong, Jongno-gu, Seoul, an apartment costs around 2.5 billion won. In Manhattan's Upper East Side, there are many homes priced at around $2 million. In Center City, Philadelphia, there are even more homes priced below that. While the house prices are similar, the average household income in Seoul in 2024 is lower, making the burden much heavier.

People in their 50s and 60s have worked for a long time and accumulated considerable assets, and with their children mostly raised, their financial burdens are reduced. The situation is similar in Seoul, New York, and Philadelphia. However, Koreans have a much higher proportion of their wealth tied up in housing. Apartments serve as both a means of residence and an investment vehicle. For this reason, rising real estate prices have an even greater impact on the economy. Most people hope that property values will increase or at least remain stable.

If this problem is not resolved, the burden of housing costs will inevitably continue to rise. Is there a solution? According to economic theory, increasing housing supply is the first method that comes to mind to stop price increases. However, if demand is high, increasing supply has little effect. New York is a prime example. Since the 2010s, many apartments have been built in Manhattan, but most were luxury units for the wealthy, providing little benefit to ordinary New Yorkers.

Philadelphia, on the other hand, focuses on supplying homes that ordinary citizens can afford. Perhaps because it is not as internationally famous or attractive to the global wealthy as New York, the real estate market is centered on regular people. The economic growth rate is not high, and the population is not increasing rapidly. As a result, the real estate market is structured for the general public.

Philadelphia has an important advantage that should not be overlooked. Since the 1950s, urban regeneration projects have simultaneously promoted historic preservation and small-scale new construction. Old homes are preserved, but those in poor condition are demolished and replaced with new buildings, creating a unique urban landscape in the city center. Unlike New York, where large apartment buildings dominate, Philadelphia has many row houses, making this possible. Of course, there are also high-rise apartments built on large lots. As a result, housing is available for everyone, from rental units for people in their 20s to homes for young families in their 30s and for seniors, according to their financial capabilities.

Many people dream of living in a comfortable apartment suitable for raising a family, but for the younger generation, this is now beyond their economic means in Seoul. Simply building more apartments will not solve the problem, nor is it easy to change the expectations and aspirations of young people. The solution is to supply new homes where families can live comfortably, rather than expensive apartments. There is hardly any market for such homes in Seoul, and there are very few suitable houses. Young people who want to start families in Seoul are losing their "confidence" due to this economic burden. It is urgent to develop housing policies that can give hope to those who will shape Seoul's future.

Robert Fouser, former professor at Seoul National University