Only seven percent of Seoul homes are affordable for median earners

The affordability collapse

Thirteen years ago, a middle-class family looking to settle in the South Korean capital had a reasonable chance of finding a suitable property. In 2012, roughly a third of the city’s housing stock was financially accessible to those earning a median wage. By 2025, that figure had plummeted, as only about 7% of homes in Seoul in 2025 were affordable to a median-income family using their own capital and a standard mortgage. The Organisation for Economic Co-operation and Development sets a strict benchmark for this metric, as the OECD defined an affordable home as one where mortgage repayments do not exceed 25% of household income.

This sharp contraction in purchasing power is the direct result of a prolonged divergence between property valuations and salaries. The Organisation for Economic Co-operation and Development indicates that capital-region apartment prices nearly doubled between 2013 and 2026, far exceeding wage growth. Consequently, the financial burden placed on aspiring homeowners has reached a severe level. For an average property, buyers must spend about 2.3 million won each month, or roughly 46% of income, on loan principal and interest repayment. This dynamic is reflected in broad market distress, with Seoul’s housing affordability index (K-HAI) in the first quarter this year was 179.3, surging 14.2 points from the previous quarter.

Supply shortages and an ageing stock

The rapid escalation in property prices is underpinned by an enduring scarcity of available dwellings within the capital. While the broader country has achieved parity between households and housing units, Seoul lags significantly behind the national curve. In 2024, the nationwide housing supply ratio was 102.5 units per 100 households, but Seoul’s was below 94 units.

The physical condition of the existing inventory further complicates the market. The desire for modern amenities and infrastructure concentrates buyer interest on a limited pool of newer developments. This creates intense competition, as more than half of Seoul’s apartments are over 20 years old. The combination of a strict numerical deficit and an ageing housing stock creates a highly inelastic market where even minor fluctuations in demand translate into significant price premiums for desirable properties.

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Source institutions：OECD

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