South Korea's Declining Population and Real Estate Market Challenges

South Korea's population decline will severely impact real estate demand and exacerbate economic inequalities.

### South Korea's Population Decline and Its Impact
South Korea's population has been declining since 2021, with a current population of **51.55 million**, down by **300,000** from its peak in 2020. The National Statistical Office's population projections are overly optimistic, predicting a **birth rate increase** by the early 2030s, while the reality shows a **continuous decline**. The aging population is rising, with the elderly expected to make up **nearly half of the population** by the 2070s, leading to a **long-term decrease in demand for real estate**.

### Changing Trends in the Real Estate Market
The current real estate market is experiencing a shift, with **declines now occurring after a long period of increases**. We are at the beginning of the **third cycle of these changes**, raising questions about the market's ability to **replicate past upward trends**. There is a noticeable bubble in the market, leading to a **short-term rebound**, and the situation is causing concern for those **struggling to secure a home**.

### The Current Economic Decline and South Korea's Real Estate Market
The market has seen a **significant decline**, with household debt now being **more critical than corporate debt**. The IMF has raised the global economic growth rate, but South Korea has faced **five consecutive downgrades** and warnings about its **real estate market**. While a short-term rebound is occurring, it may only last until **early to mid-next year**, with another **downward wave anticipated to follow**.

### Future Trends in the Real Estate Market
The real estate market is expected to **decline for an additional four to five years**, potentially hitting the bottom around **2027 or 2028**. A rapid drop in the market could lead to a **significant upward trend** as early as **2025 or 2026**. The current decline in real estate project financing has resulted in a **significant drop in new housing supply** since 2022, with a **considerable increase expected by the second half of 2025**.

### The Future of Apartment Occupancy in South Korea
A significant drop in new apartment occupancy is expected from the second half of 2025, lasting through 2029. This decline will lead to a **scarcity of new apartments** and a **widening gap between newly built and existing apartments**, driving up prices. The situation is likely to **exacerbate the wealth gap**, increasing the **rich-get-richer and poor-get-poorer phenomenon** in the real estate market.

### South Korea's Population Decline and Its Impact on the Real Estate Market
* 📉 Discussions in the early 2010s suggested a potential population decline similar to Japan's, but the population continued to rise until 2021, with current figures around **51.55 million**, down about **300,000 from 2020**.
* 🔮 The National Statistical Office projects future population trends, but these forecasts seem **overly optimistic** as they predict a **birth rate increase** by the early 2030s, despite ongoing declines.
* 🏚 South Korea is experiencing the **fastest low birth rate and aging population**, leading to a **significant decrease in demand for real estate**, especially as the **working-age population begins to decline**.
* 📊 By 2040, the elderly population is expected to account for **34% of the total**, raising concerns about **long-term real estate demand** as the demographic composition shifts.
* 📉 Historical cycles show that population growth has been followed by **regular increases and decreases every 13 to 14 years**, and we are currently at the **beginning of a downward cycle**.
* 💔 The current short-term rebound in the real estate market may not signify a true recovery, as previous rebounds have typically lasted **only about a year**, suggesting **further declines may follow**.
* 🏗 A significant drop in new housing supply is anticipated due to halted real estate project financing, which could lead to a **scarcity of new apartments and rising prices**, exacerbating **wealth inequality** in South Korea.
* 💡 Given these factors, applying for new apartments priced **10 to 15% below market rate** that will be ready in **2 to 3 years** could be a strategic move for potential buyers.

대한민국 인구 감소, 언제쯤 집값에 영향을 미칠까? (ft. 김기원 대표) / SBS / 미드나잇 초대석 / 경제자유살롱

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