Home Investments

View of Apartments in Jamsil-Dong looking North to Han River

Unlike their European counterparts, the majority of the apatu are not publicly owned housing stock. Neither are they considered to be housing for low income families, or hold the same connotations as their post war, high rise equivalents found in England and France. When the first apatu complex was built in 1958, they were a highly prized symbol of economic and social progress.

Today, they indicate that a family has settled down into a particular socio-economic class. Initially, this was middle class. A key element of attaining this status was that of home ownership, actively encouraged by government policy. Initially, price ceilings below market value were introduced to give people and incentive to buy their apartments (coupled with tax subsidies given to construction companies). This allowed a solvent sector of the population to consolidate their wealth and immediately drove up the value of their properties, contributing to the reality of an apatu as a speculative asset.

Although 56% of all households in Korea are owner occupied (globalpropertyguide.com) the other rental systems favour people who can put down large sums of money. The Jeongsei rental system comprises about 30% of all households which means ‘key money’.The tenant gives the landlord a lump sum, amounting to 25-70% of the value of the property. No monthly rents are paid, and at the end of the tenancy agreement, usually two years, the landlord returns the key money without interest and the tenant must move out. Other variations of this system exist where different amounts of money are paid and rent adjusted accordingly but they all reinforce the apatu as a tool of capital investment. Additionally, the short term rental term encourages a culture of swift upgrading and exchange of both a home and a neighborhood.

Statistical yearbook of Anyang district shows that out of 191,000 households, 108,802 are owner occupied and 55,572 have paid a lump sum. Only 1,400 pay rent without a deposit.

What is unusual about this highly developed property market is that despite the extortionate value of these residences their utilitarian external appearance has not changed considerably over the last fifty years.  Their value primarily depends on their size, and their location and proximity to key infrastructure such as schools and stations. Currently, a property in a desirable neighborhood south of the Han River can cost five times more than an equivalent apartment in Manhattan. (Kim Kwang Soo). What qualities of the apatu make them to continue to be such desirable housing types and why has there not been a demand for other kinds of home or living spaces? Is this lack of heterogeneity driven by the the construction sector, or does it reflect uniquely Korean attitudes about how you assess the ‘value’ of a house and a dwelling?