South Korea: Why is Seoul’s population shrinking? | Asia | An in-depth look at news from across the continent | DW

South Koreans are leaving Seoul, with factors including the high cost of housing and the appeal of suburbs and small towns for families with children.

Statistics released Monday by the South Korean government show that 9.49 million people lived in metropolitan Seoul in May this year, up from a peak of 10.97 million in 1992.

The capital’s population already fell below 10 million in 2016, and the new report from the Ministry of Interior and Security predicts that the number of inhabitants could even contract to just 7.2 million. here 2050.

This worst-case scenario would deal a major blow to the prestige of a city that has long enjoyed the reputation of being one of the most important and influential capitals in the region.

It would also raise questions about the economic vitality of a city that until recently harbored ambitions to attract multinational companies leaving Hong Kong, amid a crackdown from Beijing.

Seoul was particularly interested in attracting companies from the financial sector, to rival Tokyo and Singapore as a key market in the Asia-Pacific region.

Why do people leave?

Kim Hyun-jung swapped Seoul for the wide open spaces of northeastern Gangwon Province in 2015 and has little regret about his decision.

“The biggest reason people leave is real estate prices,” she told DW. “Prices are rising very quickly and it’s just too expensive for a lot of people to live in Seoul now.”

Kim and her college professor husband left before prices really started to climb, which they are grateful for, she said.

In May 2017, the average house price in greater Seoul was 341 million Korean won (€252,000). In March this year, the same property changed hands for 626 million won.

Prices under the Korean-only rental system known as “jeonse” have also risen sharply, Kim said. Under a jeonse contract, the tenant pays a lump sum payment of up to 80% of the market value instead of paying monthly rent.

The owner is then able to invest this money and at the end of the contract, usually for two years, the deposit is returned.

For Kim, a 44-year-old part-time teacher, there were a host of other reasons to leave Seoul, which is now about 2.5 hours away by car.

“It’s really easy to find a house near where we live now, the houses are bigger and the prices are much lower than in Seoul,” she said. “The quality of life is much better and my children can go outside and play instead of being surrounded by crowded places.”

In addition, kindergarten places were free and after-school lessons for children, including piano and taekwondo, are much cheaper.

“I miss my friends and family in Seoul, of course, and I like to go back to see them and visit museums and department stores, but after a few days, I’m always ready to go home,” he said. she declared. . “I like the fresh air, the relaxed pace of life and the fact that there are no crowds.”

Suburbs and satellite towns

Dan Pinkston, professor of international relations at the Seoul campus of the University of Troy, said there was a clear trend of people leaving the central area of ​​the South Korean capital and resettling in the suburbs and satellite towns.

“The government has invested heavily in transportation infrastructure, including extending subway lines and high-speed surface trains from these satellite communities so people can live further afield while still getting downtown.” , did he declare.

“A lot of people like it because these new cities that have developed have new facilities, modern schools and hospitals, and better quality of life, but they can still work in Seoul.”

Work has already begun in Sejong, a planned alternative South Korean capital

Seoul’s population decline shows no signs of abating, with serious implications for the economy.

A new study by global mobility firm ECA International has determined that Seoul is the 10th most expensive city for expats, with rent, transportation and other living expenses factored into the equation.

Hong Kong topped the list for the third consecutive year, with Tokyo, Shanghai and Guangzhou all in the top 10 cities.

As a result, many Korean companies complain of having difficulty recruiting skilled foreign workers, especially in the science, technology and engineering sectors.

A new corporate culture

Pinkston agrees that multinationals looking for another base of operations in Asia-Pacific could go elsewhere, although this may be partly due to a move away from the “traditional” way of doing business.

“There are a lot of tech start-ups emerging now, founded by young people who don’t want to go down the usual route of studying hard to get into a big school, a big university, and then one of the biggest companies in Korea,” he said. “We are moving away from that model.”

And one of the great advantages of the modern technology-based economy, he pointed out, is that a company no longer needs to have its headquarters in an expensive office building in the central district. affairs of a capital. What might be good for an entrepreneur, however, might turn out worse for a city like Seoul.

Edited by: Wesley Rahn

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