Housing is the starting point for family formation, and it is difficult to expect a recovery in the fertility rate without stable housing. According to the Bank of Korea, the burden of housing has reduced the number of children who wish to buy a house by about 6% and the National Statistical Office survey also cited “lack of marriage funds such as housing costs” (31.3%) as the biggest reason for delaying marriage. In addition, at a policy meeting, mothers with five children cited “special supply of multiple children” as the most effective policy.
Reflecting this, the government announced a “measure to reverse the trend of low birth rate” in June last year. This measure is designed in four directions. First, it expanded the supply of housing to newly married, childbirth, and multi-child households. It increased the ratio of preferential supply of newborns when selling houses and discovered new housing sites by lifting green belts in the Seoul metropolitan area, laying the foundation for the supply of about 120,000 households per year, which is 50% of the annual number of births of about 240,000.
Second, strengthening financial support for maternity households. The income requirement for special newborn loans for stepping-stone and timber loans has been eased from 130 million won to 200 million won, making it easier for end-users to afford housing.
Third, the housing subscription system, which had a ‘marriage penalty’, was reorganized and converted to a ‘marriage merit’. In the case of special supply for newlyweds, the history of winning pre-marriage subscription was excluded, and the special supply for the first time in life, which was only possible once in a lifetime, allowed new birth households to win again once.
Fourth, it has improved the convenience of living in public rental housing. Fertility households allowed their children to renew their contracts for up to 20 years until they reached adulthood, and if they had children under the age of 2, they could move to a wider equilibrium nearby. This is also spreading to local government projects such as Seoul’s ‘pre-home’.
These housing support policies have contributed to the recent rebound in fertility rates. However, in order to continue this rebound, housing support needs to be strengthened in accordance with the following four directions.
First, high-quality public rental housing should be greatly expanded. It is necessary to provide high-quality and wide public rental housing for childbirth and multi-child households by utilizing non-functional green belts in the Seoul metropolitan area, and to guarantee long-term residence by giving them an opportunity to switch to sales when certain requirements are met.
Second, it is necessary to increase the accessibility of multi-child households to housing. If the real estate market stabilizes in the future, it is also necessary to consider easing income and asset requirements for households with three or more children in special supply or policy loans, taking into account the ultra-low birth rate at the level of the national crisis.
Third, there is a need for a housing policy that embraces non-marital birth households. As the rate of non-marriage births in Korea is increasing from 2.3% in 2019 to 5.8% in 2024, it is necessary to prepare housing policies for non-marriage and common-law birth households.
Finally, it is also necessary to consider strengthening tax benefits for married and childbirth households. As newlywed and childbirth households are end users, they can adjust the exemption limit for gift tax for newlyweds from 300 million won to a higher level in consideration of housing prices in the metropolitan area, and reduce the burden of acquisition tax as well as property tax for multi-child households.
A house is a nest that houses a family. When stable housing is supported, marriage, childbirth, and childcare are possible without worries. It is necessary to open a sustainable future through a rebound in the fertility rate through housing support centered on end-users.
[Joo Hyunghwan, Vice Chairman of the Low Fertility and Aging Society Committee]
