New couples in Korea still lean on their parents
Yang Jin-woo, 34, left, and Park Hye-jin, 28, look after their 1-year-old daughter at their home, a 39.7-square-meter (427-square-foot) unit in an apartment complex. Struggling with an 80 million won (66,000 dollars) government loan offered to newlyweds, the couple claims they can’t imagine having a second child. [KIM HYUN-DONG]
At 57, Park had worked at a local hair salon for over two decades, a job that was “just enough to earn some pocket money.” Her husband had retired and found a new job guarding an apartment complex. They were a bit anxious about whether they could afford a long retirement, but that didn’t prevent Park from trying to give more to her son, who was over 30 years old.
Park decided to give her second son 100 million won ($83,000) as a wedding gift to help him find an apartment to buy. The gift included part of the severance pay her husband received when he retired from his job.
The son found an apartment that cost more than 300 million won. He got a mortgage to finance the balance.
In a survey conducted by the JoongAng Ilbo of 100 people who recently got married or are planning to do so soon, over half said their parents helped them financially to settle into a new residence. Among 58 people in that category, 19 of them, or 33 percent, said their parents paid all their residence expenses; three others said they moved into their parents’ residence.
Mrs. Baek, an office worker, moved into a small residence with her husband after managing to pay 50 million won for the deposit. But the rent - 350,000 won per month - is being paid by her in-laws.
Kim Mo-ra, a 31-year-old planning to tie the knot in November, says her case was more fraught: The groom-to-be doesn’t have a stable income and is studying to become a public servant.
“We couldn’t afford getting a new residence, so we’ve decided to live with my in-laws until our circumstances improve,” Kim says.
For the betrothed in Korea, the possibility of getting married depends more on financial circumstances rather than sheer love. When neither have enough cash to settle into a new residence, or the couple ends up struggling to pay off debts and mortgages, the idea of having children can be horrifying.
Late last year, the central government laid out a five-year plan for newlyweds, primarily promising to financially support them in their housing needs. Loan limits were raised from 100 million won to 120 million won for those planning to live in Seoul and Gyeonggi; the limits for couples outside that region was raised from 80 million won to 90 million won.
The government will finance up to 70 percent of a jeonse (lump-sum rent deposit) contract through state coffers. To get the full benefit, a couple in Seoul or Gyeonggi would have to search for a residence worth at least 170 million won under a jeonse contract, while in other areas, they would need to look for a place that costs 128 million won or more.
To be eligible, couples must earn a combined annual salary of 60 million won or less.
But a recent JoongAng Ilbo study of how many jeonse residences were available for those amounts produced dismal results. Only 6 percent of all residences between 36 and 85 square meters (388 and 915 square feet) could be afforded under those terms. The size range was chosen because those are the sizes of public rental homes offered by the government to a limited number of low-income newlyweds.
During the past three years, nationwide jeonse prices have jumped 25 percent, while household incomes of families whose parents were aged 39 or less rose a mere 5.9 percent, government statistics show.
In a follow-up to that story, which was published in the Korea JoongAng Daily on Jan. 25 under the headline, “Cheaper housing is way to boost number of kids,” the JoongAng Ilbo surveyed 100 people who were married for less than five years or planning to marry soon.
Among the sample of 100, 47 were interviewed in-depth.
Twenty respondents who moved to a new residence said they are paying off both capital and interest on a housing loan at an average rate of 1,280,000 won per month, which accounts for 24.2 percent of their total family income.
Son Jeong-bin, an office worker in Yongin, Gyeonggi, will get married in three months and is looking for a residence going for 100 million won or less on a jeonse contract, 80 percent of which he plans to pay through a loan.
So far, he’s out of luck.
“If I were to actually purchase a residence with my own money, I don’t know how old I’d be by then,” says Son, 29. “When my wife and I can afford moving to an apartment, we’ll then consider having children.”
While analysts say government incentives for newlyweds are far from sufficient, many point to the understaffed and inexperienced personnel in the Division of Population Policy within the Ministry of Health and Welfare, which is in charge of the policies for married couples.
Partially assisted by the Division of Childbirth Policy, 15 officials in the population policy division were in charge of laying out the five-year plan for tackling the country’s low birthrate and aging society. Not a single person on the team majored in demographics in college, and the longest-working employee in the group had less than two years of experience.
They were responsible for a five-year national initiative that was expected to cost 200 trillion won.
“Housing and employment are two of the most important pillars for solving the low birthrate problem,” says Yun Hee-suk, director and vice president of the Korean Development Institute’s public finance and social policy department.
“It’s way too much for the Health Ministry to handle when they have to consider those two key factors, all the while taking into consideration each of their future strategies,” Yun adds. He said a separate group focused on that task needs to be established under the prime minister’s office.
BY SPECIAL REPORTING TEAM [lee.sungeun@joongang.co.kr]
with the Korea JoongAng Daily
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