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Shinhan Financial Group's Shinhan Future Strategy Research Institute on 8 released a report, "What Would Change if Home Prices Stabilize," analyzing how housing price stability affects household finances and the financial market.
The report said that in South Korea's asset structure — where about 70% of household assets are concentrated in real estate — higher home prices can widen wealth gaps and raise housing costs, weighing on the broader economy through weaker consumption.
As of 2025, the top 20% by net assets held 65% of total net assets, while the bottom 40% held 4.8%, the report said. It added that younger generations' share of the contribution to asset inequality reached 44%, indicating deepening inequality in which parents' real estate holdings shape their children's starting point.
The net-asset Gini coefficient — an inequality measure in which values closer to 0 indicate more equal distribution — hit 0.625 last year, the highest since records began, the report said. South Korea's PIR, a price-to-income ratio, stood at 24.1, far higher than in major advanced economies. That implies a median-income household would need more than 24 years to buy a home even if it saved all of its income.
Housing costs are also directly affecting consumption, the report said. With 76% of household assets tied up in real estate, about 20% of households were classified as "wealthy but liquidity-constrained," meaning that even if home prices rise, their ability to spend remains limited.
If home prices stabilize and housing-cost burdens ease, the biggest rebound in consumption is expected among young and middle-aged groups, the report said. It pointed to ages 25 to 39 as showing the sharpest consumption pullback linked to rising home prices, suggesting the strongest potential for a rebound. It also said more stable housing costs could lower barriers for young people to marry and have children and increase spending on education, self-development and investments for job changes.
The report also projected changes in financial-market demand. If the burden of buying a home eases, demand could rise among young people and newlyweds for early asset-building products such as savings plans to build seed money, youth individual savings accounts (ISA) and installment funds.
Shinhan Future Strategy Research Institute said, "Easing the housing-cost burden can bring positive changes across household life, including a recovery in consumption and improved conditions for marriage and childbirth."
* This article has been translated by AI.
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