Debts held by homeowners in South Korea grew faster than their income in 2011, data showed Tuesday, indicating that the slowing economy and heavy financial burden from housing loans are causing many to become the so-called “house poor.”
According to the data offered by the Bank of Korea and Statistics Korea, household debt among homeowners came to 63.53 million won (US$ 56,570) last year, up 12.9 percent from 56.29 million won a year earlier.
Over the same period, their disposable income rose 9.3 percent from 33.73 million won to 36.88 million won. As a result, the debt-to-disposable income ratio among homeowners increased from 166.9 percent to 172.3 percent, the data showed.
The figures indicate that the livelihood of such homeowners has been toughening over the past few years, as they have to pay a large portion of income to homeownership.
Last year, homeowners paid an average of 600,000 won every month for costs related to their housing loans, a 25 percent rise from a year earlier, the data showed.
Circumstances have become particularly harsh for those who purchased homes by borrowing from banks. A protracted economic slump and rising financial costs for homeownership are causing many to fall into the house poor, experts said.