The number and share of home purchases by buyers in their 30s reached a record high in Seoul's apartment market this year. Both figures surpassed levels seen in 2020-2021, the peak of "yeongkkeul" (buying by pulling together every available resource, even one's soul) home purchases. Their buying is not limited to Seoul apartments but is spreading to apartments in Gyeonggi Province and even to Seoul's redevelopment villa market in the very early stages of restructuring projects. Their financing methods have also shifted qualitatively, with the center of gravity moving from the past "gap investment" focus toward gains from stocks and cryptocurrency and gifts, making them a new variable in metropolitan housing prices, analysts said.
30-Somethings Move Beyond Seoul, Gyeonggi Apartments Toward Redevelopment
According to the Korea Real Estate Board on Thursday, buyers in their 30s purchased 14,103 Seoul apartments in the January-May period this year, accounting for 40.9% of all transactions. Both the number and share are the highest since data collection began in 2019, and the volume is about 24% higher than in 2020 (11,414 units), which had the largest transaction volume for a January-May period. The share of Seoul apartment purchases by those in their 30s soared to 45.9% in April this year, breaking the previous monthly record of 40.2% set in January 2021.
The presence of 30-somethings in the real estate market is also spreading to Gyeonggi Province apartments. Apartments in Gyeonggi purchased by those in their 30s during January-May totaled 27,351 units, a sharp 52.9% increase from the same period a year earlier. The higher a region's cumulative price increase this year, the more prominent the buying share of those in their 30s. In Anyang's Dongan-gu, where apartment prices rose 10.26%, buyers in their 30s accounted for 53.7% of purchases in January-May, and in Gwangmyeong (51.3%), where one in every two buyers was in their 30s, prices rose 9.5%. In Hwaseong's Dongtan-gu (13% increase, 47.4% share among those in their 30s) and Guri (8.2% increase, 45.7%), both designated as additional regulated areas on Sunday, 30-somethings were seen as leading the rise in housing prices.
Seoul's non-apartment transaction volume also exceeded 5,000 units in each of April and May, for the first time in four years since May 2022. The share of transactions in non-apartments accounted for by those in their 20s and 30s rose to 31.7% in October last year, reaching the 30% range, before expanding to 34-35% in April and May this year.
Non-apartment investment by the 2030 generation is particularly notable in areas in the early stages of restructuring projects. The head of a real estate agency, identified as A, in Nokbeon-dong, Eunpyeong-gu, Seoul, said, "The area around 35-78 Nokbeon-dong was selected as a Fast-Track Integrated Planning redevelopment candidate site in November last year, and buying demand surged right before the selection." He added, "Eight out of 10 buyers were in their 30s." The renewed momentum of Fast-Track Integrated Planning following Seoul Mayor Oh Se-hoon's fifth-term election win was also analyzed as stimulating buying demand.
As transactions become more active, some key areas have seen prices surge from the "serial numbering" stage, the first step of redevelopment. The Sadang 21 district in Dongjak-gu, which was assigned serial numbers in December last year and selected as a Fast-Track Integrated Planning candidate site in May this year, saw transactions surge around the time of serial numbering, with 74 multiplex homes traded through mid-May. Multiplex prices, which stood at 70 million to 80 million won per 3.3 square meters of land share before serial numbering, jumped to around 120 million won right after serial numbering, and current asking prices now start at 150 million won. An official at a nearby agency, identified as B, said, "For small multiplexes, transactions reach up to 180 million won per share, with asking prices formed at similar levels." He added, "Buyers who bought right before serial numbering effectively purchased at more than 100 million won cheaper per pyeong."
Share of Stock, Crypto Sale Proceeds Exceeds 5%... "Unlike the Past 'Yeongkkeul' Era, Capital Base Is Solid"
The way 30-somethings raise funds has also changed significantly from the "yeongkkeul" period of 2021. An analysis by The Seoul Economic Daily of home acquisition fund-raising plans obtained through the office of Rep. Kim Jong-yang of the People Power Party, a member of the National Assembly's Land, Infrastructure and Transport Committee, found that the average equity ratio (including gifts) of 22,258 home transactions by those in their 30s from February 10 to the end of April this year was 46.1%, up 5.4 percentage points from 2021.
The most notable change is in proceeds from the sale of stocks, bonds, and cryptocurrency. Their share of total funds raised jumped 3.1 percentage points from 2.0% to 5.1%, and the amount per transaction surged about fivefold from an average of 8.86 million won to 42.3 million won. Funds from gifts and inheritance also more than doubled in share, from 3.4% to 7.5%. The amount per transaction rose fourfold, from 15.54 million won to 61.99 million won.
By contrast, the use of rental deposits, a key means of purchasing by those in their 30s in 2021, plunged 19.1 percentage points in share, from 24.8% to 5.7%. The government's gap investment regulations were analyzed as the direct cause.
During this period, housing prices rose steeply by 82%, with total funds raised per transaction climbing from 450 million won to 820 million won, and reliance on financial institutions grew to fill this shortfall. The share of loans from financial institutions surged 12.1 percentage points over five years, from 29.1% to 41.2%, and the loan amount per transaction jumped 2.6-fold, from 131.5 million won to 338.72 million won. Given that the loan shares of those in their 40s and 50s who purchased homes during the same period were lower, at 26.2% and 15.0%, the high loan dependency of those in their 30s stands out.
Ham Young-jin, head of Woori Bank's real estate research lab, noted, "Although strong loan regulations continue, first-time homebuyers in their 30s buying for actual residence can get a loan-to-value (LTV) ratio of up to 70% even in regulated areas." He added, "The many policy loan opportunities such as Bogeumjari Loans, Didimdol Loans, and newborn special loans are also a cause." The increase in high-income dual-earner 30-somethings under the debt service ratio (DSR) regulation, where loan size grows in proportion to income, was also analyzed as having an effect. Among 30-something married-couple households with children under 18, the share of dual-earner households rose to 60.4% last year, up 1.9 percentage points from the previous year, exceeding 60% for the first time in related statistics.
When They Move, Housing Prices Stir... One in Two Gwangmyeong Buyers Is in Their 30s
With 30-somethings acquiring homes using their own equity such as stocks, cryptocurrency, and gifts, without unstable "gap investment," experts are assessing that their purchasing power has significantly increased. There are observations that they could determine the direction of housing prices, given that they have the capital strength to not be swayed by government financial and tax regulations.
Park Won-gap, chief real estate specialist at KB Kookmin Bank, forecast, "The 30-somethings now are leading the real estate market with a qualitatively different capital strength than during the 'yeongkkeul' and 'panic buying' era, when they bought homes as if chased by rising prices." He added, "Just as localized surges appeared in regions of interest to those in their 30s, such as Hwaseong Dongtan, they will draw a new topography of the housing market."
Experts also observe that the buying by those in their 30s in the Seoul and Gyeonggi markets will continue for the time being. Housing price increases due to a shortage of new supply and the instability of the rental market are cited as the biggest causes. Ham said, "The decline in Seoul apartment move-in volume is set to continue until next year, making it a structure in which rental listings are unlikely to increase significantly." He forecast, "Until next year, buying by 30-something end-users for 'securing their own home' will continue."
A "surge in demand" driven by increased purchasing power is also a concern amid an already tight supply. Chae Sang-wook, CEO of Connected Ground, said, "Amid a shortage of housing supply, the government is trying to suppress demand through measures such as loan regulations, but the purchasing power of those in their 30s, whose capital strength has grown through stock investment and bonuses and who actively use leverage such as financial loans, is even stronger." He forecast, "Unless base rate hikes and large-scale supply plans are presented simultaneously to improve the situation of 'rising demand, insufficient supply,' the young generation's desire to buy homes and the rise in housing prices will not easily break."
