Homeownership in South Korea: Examining Sector Underdevelopment

Despite government emphasis on home purchase and four decades of extensive house building, levels of owner-occupation in South Korea remain relatively modest. This paper examines Korean homeownership policy development, identifying key reasons for the limited growth: the underdevelopment of housing finance; unproductive government intervention on property speculation; ineffective tax support for low-income home purchase; and the structure of the rental sector. Korean housing policy is characteristically supply driven, which has expanded housing stock but distorted distribution, increased speculation and polarised housing wealth. This paper considers the underdevelopment of demand-side policies as the underlying failure in the sustainable and equitable expansion of homeownership. It also implicates housing more centrally in East Asian policy regime divergence. intense between 1989 and 2007, during which time 10 705 656 units, or 70.6 per cent of all housing, were constructed (563 456 new homes per year) (MLTM, 2008; KNHC, 2009). The intensified production of housing for sale was expected to feed considerable expansion in homeownership rates, which has been the explicit target of past and present govern-ments (Lim et al., 1980; Kim, 1993; Park, 1998; Park, 2007). However, increases in housin