A billion won house, a million won in the bank: Older adults get squeezed on rising living costs

An Asian man is looking out the window from his house [GETTY IMAGE PRO]

 
Retired and in his 70s, a man surnamed Kim lives in an apartment in Gangdong District, eastern Seoul, worth more than 1.5 billion won ($1 million). The value may have doubled since he bought it at 700 million won, but in no way has that translated to an affluent retirement.
 
Kim's monthly income — including the national pension and support from his children — comes to about 2.5 million won. After paying loan principal and interest along with utility bills, his budget falls to around 1 million won. “At my age, it’s not easy to sell my home and leave the neighborhood I’ve lived in for so long,” Kim told the JoongAng Ilbo.
 

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This is a typical case of a “house-poor older adult,” a local label for those whose home values have risen while their disposable cash has dwindled.
 
Roughly one in five older homeowners, or 1.34 million out of 6.22 million, of the whole home-owning demographic fall into this category, according to the JoongAng Ilbo's analysis of the 2025 Household Financial Welfare Survey conducted by the Ministry of Data and Statistics.
 
The analysis defines "house-poor older adults" as those aged 60 or older who own their homes, have more than 70 percent of total assets tied up in real estate, hold financial assets below their annual income and fall within the bottom 50 percent in income, earning 3.05 million won or less per month. 
 
The number of such older adults rose from 1.17 million in 2017 to 1.34 million as of 2025, according to the analysis.

People walk past quick-sale notices posted at a real estate office in Gangnam District, southern Seoul, on March 30. [NEWS1]

 
Unlike house-poor individuals in their 30s and 40s, who typically struggle with the principal and interest on a mortgage, this older group is characterized by a lack of sufficient income and immediate cash. Their average total assets amount to 290 million won, of which 92.6 percent, or 280 million won, is tied up in their homes. Financial assets average just 8.59 million won.
 
The cohort is concentrated in the greater Seoul area, accounting for 24.5 percent of homeowners aged 60 or older in the area, compared to 19.6 percent outside the capital region.
 
Their average monthly income is 2.22 million won, with disposable income at 1.98 million won. One in six, or 17 percent, of older households are already running a deficit.
 
From 2017 to last year, income rose from 1.49 million won to 2.22 million won, but discretionary income fell from 900,000 won to 650,000 won. Rising costs for food, housing and health care drove the decline, with medical expenses alone accounting for about 10 percent of disposable income.
 
This year, the burden is expected to grow further due to a rise in official property values — up 18.67 percent in Seoul — which increases holding taxes.
 
Additional systems linked to official property values, including health insurance premiums, also raise the overall burden.
 

A woman overlooks Seoul from Jung District, central Seoul, on March 16. [NEWS1]

While selling seems like a simple solution, the reality is more complicated. Capital gains taxes, brokerage fees and moving costs can total tens of millions of won. Moreover, older homeowners tend to prefer staying in place or passing on their homes through inheritance rather than selling.
 
“Unwanted relocation can lead to higher medical and caregiving costs,” an expert from the Korea Research Institute for Human Settlements said.
 
Experts say that instead of encouraging home sales, structural solutions are needed to convert housing assets into income while allowing older adults to remain in their homes.
 
One alternative is the Korea Housing-Finance Corporation’s home pension program, a reverse mortgage that lets homeowners receive monthly payments while continuing to live in their homes by using the property as collateral.
 
However, eligibility is limited to those with houses that are worth 1.2 billion won or less, creating a significant barrier for homeowners in major parts of Seoul where housing prices have surged. The program's participation remains in the 2 percent range, according to the corporation.
 
Financial institutions have also begun introducing new approaches.
 
One example is a private home pension service proposed by Hana Financial Group in late 2024 for homeowners with properties exceeding 1.2 billion won in official value. The program allows homeowners to place their property in a trust and receive pension payments, extending access to those with higher-value homes or properties slated for redevelopment.
 
The Bank of Korea has also emphasized the need to activate the home pension program. 
 
In a report released last year, the central bank said it “could boost real GDP by 0.5 to 0.7 percent and reduce the poverty rate among older adults by 3 to 5 percentage points,” adding that “product competitiveness needs to be improved and private-sector regulations eased so that strong potential demand translates into actual subscriptions.”

BY KIM WON [lee.jian@joongang.co.kr]