If you look at it, there were discussions in the early 2010s about a population decline, suggesting that we would become like Japan, but in reality, the population did not decrease. The population continued to decline, but the number of households grew. However, the actual population decline began in 2021. Currently, the population is around 51.55 million, with the peak being in 2020, and it has decreased by about 300,000 since then. Thus, we have now entered an era where even the population is declining, and this is just the very beginning. 

Looking at the next data, we can see how much the population is expected to decrease. This is data from the National Statistical Office, which has created population projections based on various current assumptions to forecast the future. I have been closely observing this statistical data, and I find it to be overly optimistic. What I mean is that they predict that the birth rate will increase again by the early 2030s.

This data was created based on assumptions, but in reality, our birth rate is continuing to decline. If you look here, there are three scenarios: the worst case, the middle case, and the best case. Currently, we are heading towards the worst case. This indicates that we are entering an era where the population is seriously decreasing. Of course, I am not saying that a decline in population will lead to a real estate market like Japan's; that is not my point at all. However, it is natural that a decrease in population will lead to a continuous decline in demand for real estate. As you can see, the fastest low birth rate and aging population are occurring in South Korea, which also has the highest debt-to-GDP ratio in the world. Therefore, if the shock to the real estate market worsens, it could have extremely negative consequences for the financial market and the economy of South Korea.

Because it can have such a significant impact, I believe that each citizen should seriously consider some data for a smooth landing of the real estate market in South Korea. Moreover, the demographic composition is very important. Since the 2020s, as you can see, the population aged 15 to 64—commonly referred to as the working-age population—has been buying homes. However, since the 1960s, the working-age population has been increasing, but now we are witnessing an unprecedented decline in this group. So, who is increasing? Only the elderly population is on the rise. As you can see, by 2040, the elderly will account for 34%, and by the 2070s, they will nearly make up half of the population. Therefore, while there may not be any immediate significant issues, when looking at the mid- to long-term perspective, the demand for real estate will inevitably continue to decrease.

In the past, the extent of increases was much greater than decreases, but now we are seeing completely different scenarios unfold. It might be worth seriously questioning whether a different picture could emerge. During periods of population growth, cycles of increases and decreases have repeated approximately every 13 to 14 years. Currently, we are at the beginning of the third cycle, and a decline has just started, occurring only about a year ago. Therefore, it is important to consider whether the real estate market can truly replicate the significant upward trends of the past, which everyone hopes for. From a data perspective, when looking at the housing purchase burden index and various income metrics, while we may not be facing a significant decline, it is clear that there is indeed a bubble present.

Because of this, there is currently a short-term rebound happening, and due to this situation, if you still can't secure your own home now, isn't that a serious problem? Isn't it like a bolt from the blue? For our subscribers and viewers who might have such fears, I hope you can take a look at this data and ask yourselves more serious questions before making any decisions. There have been a couple of serious times in the South Korean real estate market. For instance, during the IMF crisis, there was a significant decline, and then there was another downturn later. During the IMF crisis, household debt exceeded 100% of GDP. Although individual household debt wasn't a severe issue at that time, corporate debt became problematic, leading to a significant shock to the South Korean economy, which affected the real estate market.

There was a time when the market experienced a significant decline. Currently, the problem is that while corporate debt is serious, household debt is even more critical. As a result, recently the IMF has raised the global economic growth rate, but South Korea has been downgraded five consecutive times. Moreover, various economic institutions around the world are issuing warnings about the South Korean real estate market. Therefore, whether this will happen or not is uncertain, but what is clear is that there are numerous debt issues, and we are only a year into the decline of the third cycle. Compared to the past, there was a long wave of decline lasting six to seven years, and during this process, short-term rebounds have always occurred. So, the current situation is...

We need to consider whether this short-term rebound will be just that—a temporary rebound—or a genuine recovery. It would be helpful to look at chart data over a long period to make that determination. Now, we need to make some assumptions. If we consider the first and second cycles, and if a third downward cycle is on the horizon for the Seoul real estate market, we should estimate when the bottom might occur. Looking at the current data, we can see that a short-term rebound is indeed taking place. However, it is important to note that previous short-term rebounds did not last very long, typically around one year, or at most a year and a half. This means that the current rebound might continue until early to mid-next year, but we anticipate that another downward wave will follow. If the entire downward cycle lasts about six to seven years, then...

Then, from now on, we need to see a decline for an additional four to five years. Based on past cycles, we could expect this to happen around 2027 or 2028. However, this is not an official opinion from Kim Ki-won. I consider this to be the first scenario. Another scenario I have in mind is that while the current rebound is indeed continuing, it may not be a gradual decline but rather a more rapid drop than expected. If that happens, then a short-term rebound could lead to a significant upward trend much sooner. This could be around 2025 or 2026, possibly as early as 2025 or 2026, and if we follow the previous cycle, it might take until 2027 or 2028 for the current real estate market to hit the bottom and start rising. There is, however, a very important variable to consider.

There is one thing to note. Typically, when there is a shock to the real estate market, such as the current decline, the supply drops significantly. This is because real estate project financing is not working well anymore. After the interest rate crisis in 2008, the amount of new housing supply in the metropolitan area decreased significantly starting from 2011, three years later. For five years, from 2011 to 2015, the amount of new housing supply was very low. The rise in housing prices only began three years after the supply decreased, starting in 2014. Now, what is similar to the past is that we have experienced a shock. Currently, real estate project financing has come to a halt, and new supply has been significantly declining since 2022. So, in three years, by 2025, we can expect a considerable increase in new housing supply starting in the second half of 2025.

It will decrease, but the extent of this decrease will be much more serious compared to the decline in the 2010s. Starting from the second half of 2025, there will be a significant drop in new apartment occupancy. This will continue through 2026, 2027, 2028, and 2029, with a shockwave lasting about five years. These events could be much more intense than the downturn in the early to mid-2010s. 

So, what does this mean? It means that new apartments will become very scarce, more so than ever before. Due to these factors, the gap between newly built apartments and existing apartments will widen, and the prices of new apartments will rise even more. This will further exacerbate the wealth gap, leading to a very high possibility of a rich-get-richer, poor-get-poorer phenomenon in South Korea's real estate market. Therefore, even now...

There are certain subscriptions available, so if you consider new apartments that are currently priced about 10 to 15% lower than the market rate and will be ready for occupancy in about 2 to 3 years, applying for these apartments could be a good option.

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

지식플랫폼 스프 앱 출시 지금 다운로드!

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

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

Scripts