Whole salary saving for 11 years to ‘buy 105.8 square meter apartment in Seoul’
Cho Eun Guk | ceg4204@ | 2017-03-17 10:14:52

‘Financial life report’ of Shinhan Bank

It has been turned out that average salary should be wholly saved for 11 years to buy 105.8 square meter apartment in Seoul.

According to Shinhan Bank``s ``2017 report on ordinary people``s financial life`` report, it turned out that the average monthly saving of KRW 4.68 million for 10.9 years is enough to buy KRW 600 million worthy 105.8 square meter apartment.

In the case of 50 year olds, who have relatively high income (average monthly income of KRW 5,990,000), it takes 9.4 years to buy apartment in Seoul and it takes 18 years for above 20 years old people, who have low income. It means, buying apartment by one person’s effort is not easy in Seoul.

The period to buy the first real estate has also been delayed as the price of real estate rises steadily. The amount of the first real estate purchase since 2010 was an average of KRW 171.77 million, which is 3.2 times more than in the 1990s (KRW 52.72 million). As a result, the first real estate purchasing age has been changed from 29 years old in the 1990s, to 35 years old now, which is 6 years later than 1990s.

It has become natural to borrow money from a bank to buy a house as property prices increased constantly. When purchasing the first real estate, only 31.7% of the real estate amount was covered by the loan in the 1990s, but in the early 2000s it increased up to 43.2% and after 2010 it has increased up to 49.3%.

Households are now paying a large portion of their monthly income to pay back the loan principal and interest rate as loan for the real estate purchase has become common.

72.7% were owed, with an average household debt of KRW 50.66 million of the 10,000 people who participated in the survey. It takes 5.5 years to pay all debts, even if households that have debt repay an average of KRW 770,000 each month.

Debt has a huge impact on the household economy and spending on other things such as marriage, real estate purchases, births, and education take place throughout the life of the family.

On the other hand, the cost of marriage has been estimated to be KRW 100 million per person. A man cost for marriage has been KRW 103.1 million and a woman cost for marriage was estimated KRW 70.22 million. A man cost was KRW 30 million higher than a woman cost.

Besides, the main money saving way for marriage is the support by parents and relatives and using their financial assets. Getting loan for marriage, on the other hand, has been estimated 25.2%.

By Cho Eun Guk ceg4204@

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