The mass exodus of Seoul residents is partly due to soaring property prices and the allure of small-town green neighborhoods for families with children.
Statistics released by the South Korean government on Monday (13/06) show 9.49 million people will live in the Seoul metropolitan area in 2022, down from around 10.97 million according to the 1992 population census.
The fall in the capital’s population has exceeded the 10 million mark since 2016. According to a report by the Ministry of Home Affairs and Safety, Seoul’s population is predicted to be around 7.2 million people by 2050.
This phenomenon is not only draining the reliable workforce in Seoul, but it is also feared that it could affect the prestige of the South Korean capital, which is trying to attract quality workers from Hong Kong and China.
The heat of the property market
Kim Hyun-jung is one of those who followed the wave of exodus of Seoul citizens out of town. Through his move, he traded the density in the capital for open green spaces in Gangwon Province, about a 2.5-hour drive from Seoul.
“The main reason why people move is the price of the house,” he told DW. “Prices are now increasing rapidly and are no longer accessible to many people in Seoul,” he added.
In May 2017, the average price of a family home in the Seoul metropolitan area was still around 341 million won or IDR 3.7 billion. Entering March 2022, the figure skyrocketed to an average of IDR 7.1 billion.
The spike in property prices also affected the rental market. Because according to South Korea’s rental system called “jeonse,” tenants don’t pay monthly rent, but instead pay a security deposit of up to 80% of the value of the house.
In this system, the property owner reaps a monthly profit from the interest on bank deposits, until the money is returned after the end of the lease period.
Urban and suburban trends
Dan Pinkston, a professor at Troy University, Seoul, admits there is a relocation trend. According to him, this phenomenon is also driven by the rapid development by the government.
“The government is investing a lot to build transportation infrastructure, especially adding fast train lines from satellite cities so that residents living far away can travel to the city center more easily,” he said.
“Most like these new cities because they have new facilities, modern schools and hospitals, and a better quality of life, but can still work in Seoul.”
A study by ECA International, a mobility and transportation consulting firm, found Seoul to be the tenth most expensive city in the world for expatriates. Meanwhile, Hong Kong still stands at the top, followed by Tokyo, Shanghai and Guangzhou in China.
As a result, not a few Korean companies admit that they have difficulty recruiting qualified workers, especially in the fields of science, technology, and machinery.
New business culture
“There are many technology start-up companies founded by young people. They usually don’t want to go the traditional route by attending elite schools and continue working at big companies in Korea,” he said. “We’re starting to move away from that model.”
According to him, one of the biggest advantages of a modern technology-driven economy is that companies no longer have to spend money to rent expensive offices in luxury business complexes. However, what is good for businesses may not necessarily have a positive impact on a city like Seoul.
Also check out ‘Eighth Day of Strike of Truck Drivers in South Korea Reach Agreement’: