More people building houses
It cost 350 million won ($310,000) to buy the land and another 300 million won to build the house. Kim sold his apartment in Songpa for 950 million won to pay for the land and construction.
“It takes 20 more minutes to commute to work, but I can smell the flowers in the morning and evening and I can invite my friends for a barbecue on weekends,” Kim said. “I am very happy living here.”
There is an increasing number of people who are selling their homes to build houses on the outskirts of Seoul. In the 1980s, houses accounted for 90 percent of all homes but the percentage declined to 25 percent in 2005. People opted to live in apartments, which they thought were more convenient.
As of 2010 in Korea, 25,008,212 people live in high-rise apartments; 15,941,063 in houses; and 4,974,719 in villas, or smaller apartment buildings, according to Statistics Korea.
But houses are making a comeback. Houses made up over 12 percent of housing construction authorizations in the country this year. The figure was below 10 percent in 2008. In particular, there are many houses being built in Pangyo new town in Seongnam, and Dongbaek area in Yongin, both in Gyeonggi. In Pangyo, there have been 280 houses built or under construction since the number of authorizations for constructing houses started increasing in May 2009.
The price of houses also rose. In the Seoul metropolitan area, the price of houses increased more than that of apartments. According to Kookmin Bank, the price of apartments in the Seoul metro area climbed 0.6 percent through October this year but that of houses increased 1.2 percent.
People’s interest in living in houses has increased due to the growing demand for a “pleasant private home,” as the supply of houses goes up and income levels rise. There are also people who want to live in environmentally friendly homes and, after the 2008 global financial crisis, the increase in apartment prices stagnated significantly, which made people less interested in investing in apartments.
“People came to think that they would rather live in a place where they would enjoy life rather than living in a suffocating apartment,” said Heo Yun-gyeong, a researcher at Construction Economy Research Institute of Korea.
The government has changed its policy toward preserving houses and this also led people to turn to houses.
The technology for building houses has also advanced. There are many construction firms that specialize in building houses and there are new construction methods being developed. Japanese construction firms including Sumitomo Forestry Co. are entering Korea.
“Construction firms specializing in building houses can manage quality and provide repair services,” said Park Chang-bae, head of Dongwha SFC Housing, a joint venture between Dongwha and Sumitomo.
It costs about 3.5 million won to 6.5 million won per 3.3 square meters to build a house. People can choose interior or design firms separately.
If these construction processes are separated, it can be cheaper but take longer to build a house. If good insulation materials are used, it could cut utility expenses by half.
By Choi Hyun-ju, Limb Jae-un [email@example.com]
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