“Even if you win an apartment, you can’t pay several billion won anyway” Young people in their 20s and 30s are cashing in their housing subscription accounts to invest “here”

[Financial News] Nearly 750,000 young people in their 20s and 30s have closed their housing subscription accounts since the start of this year, according to the data.

According to data recently submitted by the Korea Housing & Urban Guarantee Corporation (HUG) to the office of Rep. Mo Kyung-jong of the Democratic Party of Korea, people in their 20s and 30s opened 670,000 new housing subscription accounts from January through August this year. By contrast, 750,000 accounts were closed during the same period, 80,000 more than were opened.
The exodus from housing subscription accounts became even more pronounced when home prices were falling. In 2023, the number of such accounts held by people in their 20s and 30s fell by a net 200,000. Expectations of making a profit by buying through the housing subscription system weakened as Seoul apartment prices fell 7.7% in 2022 and 2.2% in 2023, respectively.
However, young people continue to leave the housing subscription system even as home prices in Seoul have recently started rising again.
The number of housing subscription accounts held by people in their 20s and 30s fell by a net 50,000 in 2024 and 70,000 last year. By August this year, the net decline had already surpassed the full-year decline last year.

The sharp rise in presale prices to levels young people can hardly afford is cited as a major reason.
An analysis by Real House, a specialist firm that assesses apartment presale prices, of data from the Korea Real Estate Board found that, as of August this year, the average presale price of a 59-square-meter apartment offered in Seoul was 1,593,430,000 won.
Given that mortgage loans in the Seoul metropolitan area and regulated areas are currently capped at 600 million won, even someone who wins an allocation for a 59-square-meter apartment in Seoul and takes out the maximum loan would need to come up with about 1 billion won in personal funds.

Young people who have concluded that buying a home in the Seoul metropolitan area is virtually impossible are turning to stock investing instead of housing subscription accounts.
The trend is also clear in the figures. According to data submitted by eight of the country’s major securities firms to the office of Rep. Kim Jae-seop of the People Power Party, the value of trades by people in their 20s and 30s rose about 26.4%, from 1,043.1555 trillion won in 2023 to 1,318.4042 trillion won last year. This year, it had already reached 1,710.0712 trillion won as of June, exceeding last year’s trading value.
Experts say policies are needed to stem young people’s exit from housing subscription accounts by increasing housing supply in the Seoul metropolitan area while narrowing the gap between presale prices and incomes.
[email protected] An Gaeul Reporter