Frustration Over Inequity and Broken Social Mobility
Young people today are more concerned about housing than marriage, a stark contrast to previous generations who prioritized marriage before homeownership. In an era where dreams of building a happy family are overshadowed by calculations of security deposits and loan limits, today's youth find themselves examining real estate price lists instead of planning their futures. This reflects the current reality for young people in South Korea.However, to attribute their anger solely to housing prices misses the core issue. Young people are not just frustrated by the lack of homes; their anger stems from a sense of despair that no matter how hard they work, homeownership seems unattainable. Unlike their parents, who believed that hard work could lead to a middle-class life, today's youth understand that their salaries cannot keep pace with rising housing costs. This realization leads to frustration and anger.
The anger of today's youth does not originate from poverty but from inequity. They feel that they are not starting from the same line as others; parental wealth often determines future opportunities, and background weighs more heavily than ability. When young people perceive that inheritance holds more power than hard work, they learn resignation rather than hope. This distrust in the job market, cynicism towards the real estate market, and anger towards political leaders all stem from the same root. What they seek is not privilege but a minimum level of fairness.
Gangnam Apartment Prices Rise Regardless of Political Changes
The real estate market vividly illustrates the frustrations of young people. The government has introduced numerous policies aimed at controlling housing prices, including tax increases, loan regulations, transaction restrictions, and pressure on multiple homeowners. While the names of these policies change with each new administration, the approach of regulating the market remains largely unchanged. Yet, the outcome has been consistent: housing prices in key areas of Seoul have continued to rise over the long term. Despite multiple changes in government, Gangnam apartment prices have consistently trended upward.Why does this cycle continue? The basic principles of economics are simpler than one might think: when demand exceeds supply, prices rise. The real estate issue in Seoul is no exception. For decades, South Korea has concentrated resources in the capital region, leading to the phrase "Seoul Republic." Prestigious universities, top hospitals, cultural facilities, and job opportunities are all concentrated in Seoul. People are not just purchasing an apartment; they are buying access to education, transportation, culture, healthcare, and future opportunities. Thus, the price of housing in Seoul reflects not just the cost of concrete but all the values that have been concentrated there.
The problem lies in the fact that while demand has surged, supply has not kept pace. Reconstruction has been delayed by various regulations, and redevelopment has been hindered by conflicting interests. The number of permits and construction starts has decreased, leading to a decline in available housing. Despite multiple signals indicating a supply shortage, many policies have focused more on curbing speculation. While it is essential to prevent speculation, expanding supply and curbing speculation are not mutually exclusive; both are necessary. However, for a long time, there has been a tendency to focus solely on demand control while ignoring supply issues.
As a result, the market has moved in unexpected directions. As regulations tightened, listings became scarce, scarcity increased, and prices rose even further. In key areas like Gangnam, Yongsan, Mokdong, and Yeouido, a market emerged where "many want to buy, but few want to sell." This phenomenon of declining transaction volumes alongside rising prices is a direct consequence of this situation.
'One Smart Home' is Good, but 'Prosperous Regions' is Also a Solution
The recent phenomenon of "one smart home" should also be understood in this context. Many retirees and workers own an apartment in a prime area of Seoul, renting it out while living in relatively affordable regions. The government tends to view this as speculative demand, but the reality is more complex. For many retirees, owning a home is their last asset for retirement. Labeling all multiple homeowners as speculators and interpreting all asset ownership as unearned income oversimplifies the market. Policies should focus on balance rather than moral judgments. While speculation must be curtailed, market functionality must also be respected.Looking back, South Korea's 40 years of real estate policy offer important lessons. Gangnam's housing prices have not been controlled by administrative orders alone. No government has succeeded in stabilizing prices in key areas of Seoul solely through regulation. Conversely, when sufficient supply was achieved, the market showed relative stability. The 2 million housing supply policy during the Roh Tae-woo administration had some success due to supply. Similarly, the market stabilized after the Asian financial crisis due to increased supply and changing economic conditions. Policies that attempt to outsmart the market have failed; only those that understand the market have succeeded.
In recent elections for the Seoul mayor and local offices, real estate issues have been significant factors. Housing is not just a concern for residents of Gangnam; it also affects tenants in northern Seoul, newlyweds in the metropolitan area, and young people in rural regions. Housing prices are not merely economic indicators; they determine quality of life and shape expectations for the future. Citizens evaluate politicians based on their own lives rather than slogans. When housing prices are unstable, citizens view the government with unease, and when rental prices rise, they feel uncertain about the future. Thus, real estate remains at the center of political discourse.
However, a more critical fact remains. The reason young people cannot buy apartments in Seoul is not solely due to a lack of money; it is because all opportunities are concentrated there. Ultimately, the essence of the real estate issue is the concentration of resources in the capital region, symbolizing the limitations of South Korea's growth model. Attempting to control housing prices while leaving the structure that concentrates people, businesses, and capital in Seoul unchanged is akin to treating symptoms while neglecting the root cause.
Therefore, South Korea must be restructured. Good jobs need to be available in rural areas. Prestigious universities and research institutions should also be established outside the capital. Quality hospitals and cultural facilities must be located in regional areas. This is why the second relocation of public institutions is crucial. Expanding the national railway network is also essential. Regions like Jeonbuk, Gwangju, Daegu, Busan, Daejeon, and Gangwon should develop their own competitive growth hubs. Only then can the demand concentrated in Seoul be naturally dispersed.
Policies for All to Benefit from AI and Semiconductor Industries
In particular, artificial intelligence (AI), physical AI, advanced manufacturing, and the bioindustry present significant opportunities for national redesign. Since the industrial revolution, South Korea has relied on a capital-centered growth model. However, in the AI era, rural areas can also become new centers of growth. Strategies for physical AI in Jeonbuk, advanced industrial clusters in Saemangeum, and future industry development policies in Busan and Gwangju should be viewed not merely as regional development projects but as national projects aimed at redesigning South Korea's spatial structure.The recent outrage among young people over the shortage of ballots can also be understood in this context. Their anger was not merely due to a lack of paper; it stemmed from disappointment that the government could not even prepare basic procedures properly. Young people are most sensitive to fairness in real estate, employment, and politics. When they believe the process is fair, they accept the outcomes. However, the moment they perceive unfairness, trust in society collapses.
The greatest crisis facing South Korea today is not merely an economic crisis or a low birthrate crisis; it is a crisis of trust. A country where young people do not trust society has no future. A society that loses the belief that hard work will be rewarded, that living honestly can lead to success, and that fair competition is possible ultimately loses its vitality.
Thus, we must consider policies that restore the ladder of opportunity, going beyond merely controlling housing prices. We need to create a country where young people can dream again, where they believe they can rise through effort, and where, despite starting from different lines, they can strive for the same destination. This is the essence of political existence and the role of the state.
To say that South Korea needs a new framework is to call for restoring fairness, reviving lost hope, and creating a nation where young people can plan for the future. The best way to quell the anger of youth is not through more slogans or regulations but by restoring hope. And that hope begins with the recovery of fairness, opportunity, and trust.
* This article has been translated by AI.
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