In slow economy, more people are staying put

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In slow economy, more people are staying put

Recent government data showed that fewer Koreans are relocating due to a slow housing market.

A total of 570,000 Koreans relocated last month, a decrease of 12.8 percent compared to the previous year, Statistics Korea said Tuesday. This is the lowest number of relocations in June since 2012 when 542,000 people moved.

“The local real-estate market has slowed down compared to 2015 and qualification for taking mortgage loans has been toughened this year,” said Lee Jee-yeon, a director at Statistics Korea. “According to the data, the real estate market’s trading volume was the highest last year and it appears that fewer people are relocating due to the base effect from it.”

The government also tightened guidelines for taking out mortgage loans for the Seoul metropolitan area in February. Stiffer guidelines for other local regions went into effect in May. The government’s goal was to reduce household debt.

Last month, 119,398 people moved into Seoul as 131,462 people moved out, a loss of 12,064 residents.

“The only age group that is moving into the capital is those in their 20s for education,” Lee added.

As people leave Seoul, the number of those moving into nearby Gyeonggi has grown considerably. The net inflow was 10,215.

According to the Ministry of Public Administration and Security, Seoul’s population fell below 10 million for the first time since 1988 to 9.99 million in May. In June, the populations continued its fall, to 9.98 million.

The number peaked at 10.94 million in 1992 and has been falling since.

Statistics Korea said the major reason residents moved out of Seoul is “housing-related issues.”

In June, the average purchase price for a residence in Seoul rose 2.65 percent compared to the previous year, and the price for jeonse, or a lump-sum deposit rental contract, increased 5.33 percent during the same period, according to a KB Kookmin Bank monthly report released this month.

As of June, the average sales price of a residence was 478 million won ($420,108), and the average jeonse deposit was 314 million won. Comparatively, the average housing price in the nation was 275 million won and jeonse was 191 million won last month.

Sejong, the country’s administrative capital, posted a net gain of 2,159 people.

“As more construction for apartments in the city is done, the demand for it from neighboring residents continues to be high,” said Lee at the statistics agency. “Most civil servants have already finished moving into the city and we believe that the high net inflow is due to the high demand for new homes in Sejong.”

In addition to Seoul, other big cities such as Busan and Daegu also saw residents leave last month, with 2,113 moving out of Busan while 868 people left Daegu.

Meanwhile, 1.72 million Koreans relocated in the second quarter of this year, up 9 percent lower than the previous year.

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