Less affordability when buying a housing unit with loan: The DONG-A ILBO

A study found that the number of affordable middle-income housing in Seoul with a loan saw a notable decline as house prices began to skyrocket.

A report on the status of the K-HAI (Housing Affordability Index) in metropolitan areas and provinces from 2017 to 2021, submitted by the Budget Office of the National Assembly to MP Jeong Woo-taek of the People Power Party, showed that the index in question of Seoul is down 2.7 percent last year from 16.5 percent in 2017. The index measures a percentage of housing in a region at an affordable price level that the middle-income bracket can finance through any loan, given household wealth and income level .

Five years ago, middle-income households in Seoul could find 16 to 17 out of 100 housing units affordable even with a loan. Last year, however, they were only able to see three candidates under budget. During the same period, the index in Gyeonggi and Incheon provinces fell sharply from 51.3 percent to 26.2 percent and from 52.9 percent to 32.5 percent, respectively.

The K-HAI of middle-income households in 17 cities and provinces was 44.6 percent last year, down a whopping 14.1 percentage points from 58.7 percent in 2017.

Last year, the average incomes of one-person, two-person, three-person and four-person households were won 1.82 million and 7,831 won, 3.08 million and 8,079 won, 3.98 million and 3,950 won and 4.87 million and 6,290 won respectively.

“It’s getting harder to buy a house with earned income in Seoul,” said Professor Kwon Dae-jung of Myongji University. “With home prices rising faster than income levels, action must be taken quickly to help actual home buyers get a home.”

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