There are three major types of housing in Korea: high-rise apartments, detached houses, and row houses. Apartments are the most common form of housing in South Korea. These apartments are often high-rise residential buildings consisting of five to mostly 20 stories. Apartments are the most preferred type of housing among South Koreans because the residential environment is conveniently built around the apartment complex. Normally, hundreds to thousands of households live together in an apartment complex and they also have shopping centers, sports facilities, and childcare centers. Nonetheless, detached houses are also gaining popularity these days. In particular, it has become trendier to live in a detached house for a more relaxed or environmentally friendly lifestyle, which is away from busy urban life.
In the housing market in Seoul, the average price of apartments has risen by 40.76 percent over the past two years. Apartments located in Seoul were more than twice as expensive per square meter as apartments in other regions. Furthermore, the average transaction price of the top ten percent of Seoul apartments in 2019 was 2.13 billion South Korean won, exceeding 2 billion South Korean won for the first time in history. Additionally, people in their 30s were the most active age group in the Seoul apartment market. In Seoul, where expensive apartments were concentrated, it was traditionally believed that older people had a stronger purchasing power. However, people in their 30s, who were excluded from the government's recent real estate policy, actively bought apartments.
In 2020, housing prices in many regions in South Korea increased further. The average housing affordability index increased during the three consecutive quarters and stood at 52.3 in the third third quarter of 2020. Moreover, the housing affordability index of Seoul peaked at a new record after 11 years. A housing affordability index of 50 means that about 25 percent of monthly income is spent on the repayment of housing loans. Furthermore, the total value of mortgage loans in Korea has steadily increased as the era of low-interest-rates continues and housing purchase transactions increases. The current government has frequently implemented countermeasures to stabilize the housing market, but this has stimulated investors, resulting in more unstable house prices.
