Study shows willingness to purchase houses is upA recent study showed that many households with sufficient savings are willing to purchase homes, indicating a recovery in the real estate market.
According to a study by Hyundai Research Institute this week, 3.17 million households said they would consider purchasing a home if the government implemented a policy to boost security in the real estate market.
The study took into account 5.68 million households with the financial ability to purchase a home.
The private think tank found that 5.68 million households, or 31.3 percent of households in the country, were financially able to buy a home.
These households are considered to have financial assets with an unburdening amount of loans. The combined figure must be more than the average trading price of an apartment.
The think tank calculated that a household was not financially burdened if the principal loan was less than 20.8 percent of the household’s disposable income.
As of 2013, the principal loans compared to disposable income for these households, on average, is about 4.4 percent, which is far less than the average for other households at 34.7 percent. It said that if these households buy real estate using loans, the ratio will increase to 11 percent, which is still affordable.
The study found that between 2012 and 2013 the number of households considered unburdened by debt has increased 9 percent from 5.21 million. The number of households that were not financially stable enough to purchase a home shrunk by 1.7 percent during the same period from 12.7 million households to 12.5 million.
The study showed that 65.5 percent of the five million households were outside Seoul and that 74 percent already owned one home.
It showed that 52 percent of such households were considered middle class while 44.8 percent were high-income earners.
“[The study shows] that if proper policies and systems are backed up, large numbers of these households could be lured into the real estate market,” said Kim Gwang-seok, a senior researcher at HRI. “For those who have the financial reserves but don’t own an apartment, government financial support for first-time homebuyers needs to be strengthened and for those who already have a home and plan to purchase real estate for rental purposes the government should offer policies that encourage such investments while reforming the inheritance taxation system.”
BY lee ho-jeong [firstname.lastname@example.org]