Aging Population Contributes to Rising Home Prices

Published on 2019/12/29 | Source

The aging population is a contributing factor to rising home prices over a long-term period, according a study by Korea Housing Finance Corporation out Wednesday.

Jang Han-ik, a researcher at KHFC said, "The aging population can cause housing prices to decline over the short term, but it is a major factor causing them to increase over the long term".

Analysis of population, real estate value and regional GNI compiled between 2000 and 2017 in major cities and regions showed the aging population has led to an increase in housing prices with the exception of Busan.

The findings contrast with the common perceptions that housing prices fall as the population ages. In Japan, the aging population has caused an increase in empty homes, so naturally they get cheaper. Also, senior citizens are expected to sell their real estate to stump up money for their medical treatment and retirement expenses.

But Jang said, "Due to a rising number of one or two-person households, demand for homes continues to rise" in Korea.

Another factor supporting the correlation between the aging population and rising home prices is the availability of property-backed pension payments, which obviates the need for senior citizens to sell their homes.