Having a place to live is a fundamental part of our well-being and happiness. Over the past few years, South Korea has been facing housing problems, as the supply of houses does not meet the demand―a strange phenomenon, as Korea’s population rate is actually declining year by year. According to Statistics Korea, the housing supply rate in 2022 was lowest in large cities such as Seoul(93.7%) and Incheon(97.9%), and highest in rural Gyeongbuk(113.2%) and Jeonnam(112.4%). Considering that Seoul has the highest population density in the country, the index especially indicates the hardships of satisfying housing demands in urban areas. Diminishing housing supply and rising prices can be explained by multiple reasons, such as the government’s real estate policies, increase in single-person households, slowdowns in real estate markets and so on. The housing problem mostly affects people in their 20s and 30s, most of whom live in large cities and have only very recently earned a job. These new members of the workforce population are struggling to stand on their own feet and find a place to live due to financial difficulties and the slow pace of housing supplies.

With hardships in real estate markets during the pandemic, people have generally struggled with financial burdens as living expenses have risen. Accordingly, the South Korean government has been trying to address the issue by implementing easier loaning systems, expanding public housing, and lifting property and construction-related regulations in Seoul. However, the effectiveness of such policies can be questioned in the long term, as they do not address the root cause. In fact, the housing crisis stems from much more fundamental issues, such as young adults’ financial difficulties and unstable lives. Thus, government actions and policies need a more serious approach to this underlying issue, as it is the primary step towards a better environment for young generations in our society. In order to help young adults in the housing market, it is necessary to first look at the overall quality of their lives.

Korea’s continuously declining population and low birth rates seem paradoxical at first, given the shortage in housing supply. However, this can easily be explained by the fact that, in spite of the population crisis, the number of single-person households across the country has risen dramatically, which has resulted in over-demand and under-supply of houses. In the case of Seoul, the population decline was outnumbered by an astounding 39.3% rise in single-person households in 2022 compared to that of 2015. Most single-person households in Korean society consist of people under the age of 29, who generally have lower incomes compared to older populations. Many have also moved to the cities from more rural areas to find employment. Yet, although there are more job opportunities in the cities, the labor market is still highly competitive and does not guarantee a stable living. In this case, the main factor causing people to live alone comes from the high expenses in central cities, which comes down to financial issues. The average monthly rent of a single-household in Seoul appears to be 630,000 KRW, which takes up about 35% of the average salary of a young adult. The financial burden young adults undergo from this high rental fee is much heavier, followed by food and transportation costs.

There are also other significant reasons as to why the housing problem should be taken more seriously, as it is the cause of a variety of social issues. Not being able to afford a house has resulted in many people becoming a “kangaroo tribe,” a term referring to young adults who have failed to grow financially independent from their parents. A government survey from 2024 covering 15,000 households across the country showed that 57.5% of young adults live with their parents, followed by 22.6% living as single-units, and only 6% being young married couples. Members of the “kangaroo tribe” lack a stable, independent socio-economic base. Hence, they cannot afford a house or create a new family, which stagnates economic growth in the long term. 67.7% of those still living with their parents responded negatively to the idea of finding a house of their own on account of economic reasons. In addition, house poverty among young adults is one of the most crucial phenomena that can explain the low marriage rates and declining birth rates in Korea.

Expensive housing in the city and the heavy loans necessary to afford them entail excess financial burdens to pay off the debt, which causes young adults to stray from marriage and childbirth. Research conducted in April this year by the Presidential Committee on Ageing Society and Population Policy revealed that just 61% of 2,011 people aged 25-49 plan to get married in the future. Meanwhile, those who were negative about marriage suggested that they would be open to reconsideration if housing and living conditions improved. These opinions prove that Korean society urgently needs more institutional development to satisfy housing demands, alongside ways to handle low marriage rates and the demographic crisis simultaneously.

Yet, clearly, not every Korean is homeless or out on the streets. How do they manage to secure their living space? A keyword for Korea’s new housing trend is sharing. Co-living, which is inspired by a similar trend in European countries, is causing a transition in Korea’s housing market. Departing from the extended family culture of the past, Korea has now moved on to a more compact and atomized type of household unit while retaining privacy and independence. The imbalance in housing demand and supply in urban areas alongside the demographic cliff crisis are the central factors behind this cultural shift. Launched in Hongdae in 2023, NOUDIT is a new branded housing model that represents a more flexible flow of thinking that housing is something to consume rather than to own. It reflects people’s changing values and lifestyles as the working space, living room, and entertainment are all combined into one. The brand plans to expand its business across other parts of Seoul to introduce this new narrative way of living.

Meanwhile, cities are also providing public housing for young adults along with government subsidies according to each income level. The Seoul Metropolitan Government has presented an upcoming 2024 model for the increasing number of single-person households, aiming towards a sustainable co-existing environment. Public housing projects like this provide a living space with facilities such as a kitchen, laundry room, gym, and leisure spaces that are open to share with other residents. With this model, citizens can afford a unit with only 50-70% of the current average monthly rent of studio units in the city. The government plans to supply them for up to 6 years for people aged 19-34, and 10 years for the middle-aged and seniors. Introduced in February 2024, Seoul’s goal through this policy is to integrate a total of around 2,500 households into this project by the end of the year. This newly adopted model is particularly enticing for young adults, as it provides the many luxuries of living in the city such as proximity to train stations at a much cheaper price, whilst simultaneously allowing the much-needed privacy of an independent unit.

As in the cases above, Seoul has been implementing various kinds of public housing for the past few years, but the question still lies in the effectiveness of its results for young adults in reality. Even setting aside the high application rates and competition, many are actually giving up the chance even if they do get it because they cannot pay the deposit required to move in. Although rental fees may be cheaper, public houses demand higher deposits than the average studio unit, which means that they do not solve the financial issues one has to face. Many have also pointed out that some problems come from the system itself. Young adults who have experiences residing in public housing express dissatisfaction with facility management and faulty constructions conducted by private companies. The government virtually acts as a supplier while private companies are in charge of the real management. As such, despite expectations, there appears to be no real benefit to these public housing projects for young adults. The idea of “sharing” does take off some of the financial burden without having to own a house in the first place. However, these dwellings are ultimately temporary ways to support people until they are fully capable of being financially independent.

The housing crisis causes a considerable number of young adults to feel alienated from society. Being able to afford a space to live is significant to young adults because it is an indicator of the financial capability one has in society and is the first step one takes in being independent. Accordingly, young adults call for a more stable and promising future, which should be proposed as the government’s main objective. Rather than just focusing on increasing public housing, there needs to be a systematic approach that can help young adults ultimately become financially independent. Moreover, the quality of public housing can be improved by the government’s tight cooperation with private companies to refine inconveniences for further development.

Some of the government’s housing policies presented at the beginning of the year include allowing reconstruction in parts of Seoul and tax benefits when buying a house, which is expected to boost the supply. These implementations would also work to remedy other social concerns such as unemployment and low marriage rates. Despite the perks of metropolitan areas, where high quality of life and infrastructure is more easily accessible, the problem of low housing supply continues to plague them and their residents. Getting married, having a child, and stabilizing their lives have become a sort of luxury in these dire times of the housing crisis, especially when compared to the past. Yet, young adults should not be deprived of their freedom due to this issue and its social and financial constraints. Hence, building an active support system in our society is essential for young adults―the successors of Korea’s economy—as they navigate this unstable stage of life.