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Housing Dynamics in Korea

Building Inclusive and Smart Cities

image of Housing Dynamics in Korea

Housing in Korea has been part of the government policy development agenda for the past three decades contributing to reducing the historical housing shortage and improving the quality of dwellings. Despite its achievements, Korea now faces a housing affordability challenge as prices are too high for several social groups (i.e. newly wedded), owner occupancy levels are decreasing, and social housing is struggling to meet demand. Korea has a complex social housing system largely focused on low-income households, who still suffer from housing poverty in terms of housing stability, affordability and quality.

 

A holistic view on housing policy to promote a more inclusive society and sustainable economic growth is needed. To overcome the current housing challenge requires expanding the network of public housing providers by including the private and community sectors that could alleviate the government’s financial burden. Korea is linking housing and urban regeneration strategies to respond to the complex challenges of social inclusion, job creation, housing and economic revitalisation. Korea has been at the forefront of smart city development for more than a decade, which has brought benefits to Korean cities such as integrated transport systems, and it is now committed to applying the concept as a vehicle for inclusive growth.

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Assessment and Recommendations

Korea has made significant progress in improving housing conditions. The government’s efforts to bridge the housing stock gap and to improve quality have paid off. However, the Korean experience shows that housing construction per se does not necessarily mean people will have easy access to decent housing. Korea’s current housing challenge is to ensure access to good quality and well-located housing to low-income households to reduce inequality. Over the last three decades, Korea focused on housing construction but did not invest enough in building an attractive and secure public housing sector nor in modernising the private rental market and financial options for likely home buyers. This led to stagnant homeownership levels and house price volatility. Korea has to address its housing affordability challenge in the context of a rapidly ageing population, low fertility rates, and shrinking households. As such, the elderly, newlyweds, and young people are also part of the target population of social housing policies.

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