On August 28, 2025, the Bank of Korea left its base rate at 2.50%, citing fragile growth and mounting household debt. On the surface, it was a cautious monetary decision. But behind the numbers lies a human story: why Koreans increasingly treat the housing market not as shelter, but as their only reliable store of wealth.
Seoul real estate and the wealth gap
Between 2013 and 2023, Seoul apartment prices rose 2.1 times faster than the national average, widening the gap to 69.4 percentage points—the steepest among OECD economies (Kyunghyang Shinmun, June 18, 2025). Real estate in Seoul became not only more expensive but more essential, cementing inequality between homeowners and those left out.
Household debt as the cost of survival
To chase this rising market, households borrow heavily. In August 2025 alone, debt rose by ₩4 trillion, fueled by credit lending and secondary banks (Korea Economic Daily, Aug 31, 2025). Regulations did little to stop the tide. Families feel compelled to leverage debt simply to avoid falling off the property ladder.
Housing psychology and inevitability
Surveys echo this sentiment. The housing price outlook index hit 120 in June 2025, matching levels from the 2021 property boom (Maeil Business Newspaper, June 25, 2025). It shows that the majority of households expect prices to keep rising, turning expectation itself into a driver of the market.
Stock market distrust
Why such dependence on real estate? A central reason is deep mistrust of the Korean stock market. Decades of scandals, insider trading, and political manipulation have left retail investors feeling the system is rigged. For many, equities are gambling; property is survival.
The social cost of property obsession
Apartments are no longer homes but pensions, savings, and inheritance vehicles. This transformation carries moral costs: neighbors turn into competitors, and cities into spreadsheets. For younger Koreans locked out of ownership, the dream of stability becomes a cruel illusion.
A global warning
Korea’s housing dilemma is not unique but compressed. It shows how societies behave when trust in financial markets fails: wealth retreats into real estate, and property loses its soul. The question then is global: if houses become the only certainty, what becomes of innovation, creativity, and even love—the ventures that require uncertainty to exist at all?
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Sources
Kyunghyang Shinmun, “Seoul housing prices rise 2.1 times faster than national average”, June 18, 2025
Korea Economic Daily, “Household debt grows by ₩4 trillion in August”, Aug 31, 2025
Maeil Business Newspaper, “Housing price outlook index hits 120, echoing 2021 boom”, June 25, 2025
