Comparison between Seoul’s housing prices and income paints a bleak worldwide picture
Due to a recent surge in housing prices, the level of apartment prices in Seoul as compared to household income levels was found to be double that of the average for major cities in the United States and Britain. In fact, Seoul’s housing prices as compared to average household income is higher than all of the major cities in Australia, Canada, Ireland, New Zealand, the United Kingdom, and the United States. According to a survey of 100 cities in those six nations, the ratio of home prices to income averaged between 4:1 and 6:1. Demographia.com, which conducted the survey, said that if the ratio rises above 5:1, it indicates a level of concern. For Los Angeles, the least affordable housing market in the survey, the ratio was 11.2:1. As of December 18, Seoul’s ratio stood at 11.3:1, given that the average price for a 33-pyeong (109 square meter) apartment was 460 million won (US$493,000) and the average annual income for a household in the city was 40.71 million won. Seoul’s ratio is 25.6 percent higher than the city’s average ratio of the last 17 years, spanning from 1988 to 2005. In Seoul’s affluent Gangnam, Seocho and Songpa districts, the ratio reached 20.4:1, nearly double the prior 17-year average.In addition, the swelling of the property bubble in those three districts is reaching serious levels. Signs of a property bubble are found in other Seoul districts, as well, according to an analysis by the Hankyoreh in association with the Housing and Urban Research Institute, the Daishin Economic Research Institute, and the Real Estate Bank. Please direct questions or comments to [englishhani@hani.co.kr]
