Newlyweds feel the pinch of rising real estate prices

Economy

Published: 12 Dec. 2020, 07:00

Newlyweds feel the pinch of rising real estate prices

President Moon Jae-in, Land Minister Kim Hyun-mee and LH chief and land minister nominee Byeon Chang-heum look at the interior of a rental unit built by LH in Hwaseong, Gyeonggi, on Friday morning. Moon visited the public rental housing complex to celebrate the construction of 1 million units. [JOONGANG ILBO]

The number of newlyweds that owned homes in 2019 decreased compared to a year earlier, and the amount of their outstanding loans increased — showing the impact of rising real estate prices.

According to Statistics Korea on Thursday, around four out of 10 newlyweds, or 42.9 percent, owned houses last year, 0.9 percentage points lower than in 2018. Couples with homes have been decreasing since 2016, when the statistics agency started releasing its annual report on newlyweds.

Among first marriages, the percentage of couples with houses was 0.9 percentage points lower than last year.

The newlywed report is based on data compiled every November about couples married for no longer than five years.

Based on the assessed property values for January, the most common price range for residences owned by newlyweds was between 150 million won ($138,000) and 300 million won, which included 36.7 percent of the newlyweds surveyed, followed by houses priced between 60 million won and 150 million won (31.8 percent) and between 300 million won and 600 million won (17.5 percent).

The number of couples that owned relatively cheap residences decreased, and those with more expensive places went up. Compared to a year ago, the number of couples with residences priced under 150 million won fell by 3 percentage points, and those with houses over 300 million won rose by 3 percentage points.

“The government’s policy to increase the assessed value of properties has led to an increase in the proportion of expensive houses not just for newlyweds but for the whole population,” said Kim Jin, director of the administrative data management division at the statistics agency.

Eight to nine newlyweds out of 10 started their married lives with loans. The report showed that 85.8 percent of newlyweds in their first marriages had loans from banks, 0.7 percentage points higher than last year.

The average amount of loans held by newlyweds has been increasing by more than 10 percent every year. In November 2019, the median amount of outstanding loans for newlywed couples was 112.08 million won, 12.1 percent higher than the previous year. Those with loans between 100 million won and 200 million won took up the highest percentage, 32.4 percent, followed by the 200 million to 300 million won range, with 13 percent.

Dual-income married couples had more loans than single-income couples. Couples with children had more loans than those without.

For couples on their first marriages, the average income was 57.07 million won, 3.7 percent higher than a year earlier. Those earning between 30 million and 50 million won were most common, 24.3 percent of the total. Dual-income couples earned 1.8 times more than single-income couples, and almost half of all newlyweds, or 49.1 percent, were dual-income.

The total number of newlyweds in 2019 dropped 4.7 percent from 2018, hitting 1.26 million, following demographic trends including people waiting to get married. The proportion of couples who remarried was 20.6 percent, 0.3 percentage points higher than a year earlier.

The region with the most newlyweds was Gyeonggi, where 28.3 percent of all newlyweds resided. Seoul had 18.4 percent and South Gyeongsang 6.3 percent. Around 70 percent lived in apartments. The percentage of couples living in stand-alone houses has been on a steady decline.

BY IM SOUNG-BIN [lee.jeeyoung1@joongang.co.kr]