SEOUL (Reuters) – Even with emerging unemployment when the coronavirus pandemic swept through South Korea in February, Baek Seung-min asked his wife to give up her job as a nurse to realize her lifelong dream of buying her own apartment.
The 35-year-old interior designer said giving up his wife’s 58 million won ($48,000) would increase his chances of getting assets after the government took a series of measures aimed at cooling space prices.
The plan was to reduce his wife’s source of income for some time so that the couple’s annual source of income was low enough to be eligible for a quota formula on new genuine real estate advances designed to allow newlyweds with lower income sources to access housing. .
Despite this, Baek and his wife moved two hours west of their Seoul office in Incheon, where lending regulations were more flexible and apartments much cheaper.
“The costs of housing in Seoul are out of our reach, we had to move to Incheon to buy our place,” Baek said. “The passing government is destroying our dreams by reducing loans and telling us not to buy a house, that makes me angry.
Despite more than 20 cooling policies put in place through President Moon Jae-in’s government, speed costs in Seoul have increased by more than 50% since 2017, the world’s fastest speed, according to Numbeo statistics.
This wave shattered the hopes of many young families and noted that the “medium elegance contract” that helped build Asia’s fourth-largest economy would possibly be out of reach.
(GRÁFICO – The Rise in Seoul: here)
When Moon, left, took over the job in 2017, his main promise was to create a book-safe for all South Koreans and a society in which other hardworking people can create a circle of relatives and a home.
But tighter lending regulations with particularly small value loan ratios, as well as fiscal consequences to discourage speculative transactions, contribute to higher incomes and higher down payment needs, harming those that policies are meant to help.
Mortgage regulations in Seoul now limit loans to 40% of the home price. Pockets in the luxurious suburb of Gangnam are also subject to a transaction permit system, meaning that unsupped sales can be invalidated if an acquisition is “speculative.”
Critics say such policies mean that young people in the “golden spoon” can seize the most productive houses with their money, leaving the “dust spoons” trapped as second-class citizens, fueling the inequality Moon has promised to combat.
While some families are reducing their incomes to their chances of increasing the scale of assets, others are divorcing on paper to reduce asset taxes or do not sign their marriage to stay with separate home acquisition programs, according to two lawyers and a Reuters. fiscal accountant interviewed.
Anger against Moon’s economic policies has eliminated the increase in his approval rates for the control of the coronavirus pandemic, falling to a minimum of about nine months of 44.5%, according to a Survey conducted Thursday through Real Meter.
The Presidential Blue House declined to comment on the article.
On Tuesday, Finance Minister Hong Nam-ki said stabilizing housing costs is the main target of the government’s public welfare policy, as plans were announced to move more than 132,000 new homes to Seoul by 2028.
For decades after the 1950-53 Korean War, South Koreans saw a degree from a giant university and apartment in Seoul as the fastest way to enter the middle class, which is why about three-quarters of family wealth is concentrated in real estate. .
But now, the “dust spoons” that have rigorously and safely studied white-collar work, such as lawyers and in-house designers, say that cooling measures implemented through Moon have made it highly unlikely that they will buy assets in Seoul, even with six – the salary is figured.
Now, the average Korean family needs more than 14 years of income source to buy an average home in Seoul, assuming zero expenses. It had been 11 years since Moon took office, according to data from KB Bank.
Hong Na-ri, a lawyer who rents a three-bed room with her two daughters and her husband in Seoul, says her circle of relatives is excluded from the genuine housing market.
The value of the apartment Hong rents in Seoul’s Songpa district has more than doubled to 1.8 billion won since moving to the region in 2015.
“When I was married (in 2015), I thought the costs would shift … now everyone asks me why I didn’t buy one when I could. I’m worried, but there’s nothing I can do,” said 35. one year old, whose combined household source of income ranges from $6,700 to $10,000 per month.
“It’s like I can leave Seoul, away from our babysitter, our kindergarten and my job.”
Moon is to resolve the structural unrest of the economy.
He sought out tough chaebol conglomerates like Samsung and Hyundai, whose profits far exceeded the family source of income growth. Stricter lending regulations were imposed because the less difficult loans obtained under his predecessor to stoke the housing bubble were blamed in the first place.
Yun Chang-hyun, a conservative economist and member of the opposition United Future Party, says the government creates more uncertainty about the future.
“More than 20 separate sets of non-professional good luck measures have caused tension and anxiety in other people who want to buy something now or never.”
Cynthia Kim reports; Additional information through Dae-woung Kim, Minwoo Park, Hyonhee Shin; Edited through Lincoln Feast.
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