4 ms·
One factor that needs to be considered is that in Korea, as in many Asian regions, people are expected to look after their parents when they get old. Society an
by robjan 5y ago
One factor that needs to be considered is that in Korea, as in many Asian regions, people are expected to look after their parents when they get old. Society and social security have been build around this assumption.
- kijin 5y agoThat's been changing very rapidly in SK. Almost everyone in their 40s and 50s today have been putting money into public pension plans as well as a multitude of private options. When they retire, they won't be economically dependent on their children. Nor can they expect to, because their children's generation is by all means poorer than their own. Whether those public funds and private options will be enough, of course, is a different question.
- mathverse 5y agoThe average price of an apartment in Seoul is hitting $1M and the avg gdp per capita is around $38k.I am afraid a lot of that wealth is just real estate market speculation that might burst when the supply outstrips demand in 50 years.
- kijin 5y agoI doubt that there will be a major, irrecoverable housing crash in South Korea within the lifetime of anyone who grew up believing that their children will support them later on. In the meantime, retirees who own nothing but an expensive apartment can reverse-mortgage their homes for a stable source of income. The bank, not their children, will inherit the property. Two reasons why I don't think there will be a supply/demand mismatch: 1) Housing doesn't simply stay there once it has been built. Koreans seem very eager to tear down "old" buildings (anything more than 30 years old), so it's going to be fairly easy to control supply if demand goes down. 2) The number of people per household is steeply declining. Even if the population drops to half of the current level, if there are only half as many people per household, the total number of housing units needed will be largely the same. Smaller units will become more popular, though.
- mathverse 5y agoI hope you are right for the sake of both of us.
- onlyrealcuzzo 5y agoWhy are you so confident supply will every outstrip demand? The government could just mandate old buildings get destroyed and turned into parks. Remember, >55% of people are homeowners - they'll vote for anything that will protect the value of their homes - especially if non-homeowners pay for it entirely.
- refurb 5y agoWhose building do they tear down and turn the value to $0? That makes no sense.
- onlyrealcuzzo 5y agoFirst they can update codes so that nothing can be rebuilt in a significant portion of the city. Then they can condemn buildings that aren't up-to code after a certain point. Then they can order the buildings torn down after a longer point. Then they can make people happy by turning abandoned buildings into parks. Governments can always find ways to limit the supply of housing. They've been doing it fabulously in most of the West for the last 30 years.
- sudosysgen 5y agoThere is no magic in this world. When you make an investment into a company, you become dependent on the people that work at that company. When you're investing in a private fund, or in real estate, you're still relying on your children. The material wealth you are consuming is still being produced by the generations that come after. If your children's generation is poorer than your own and if there is less of them, then there is nothing you can do except rely on the children of people in other countries.