South Korea posts highest housing costs in five years

South Korean households’ expenses on heating, water use, rent and other housing-related costs hit KRW148.4 trillion (USD131 billion) in 2018, according to data by the Bank of Korea (BOK).

This figure marks a 4.3 percent increase from a year earlier and a new peak since 2013, Yonhap pointed out.

Last year’s searing temperatures and extreme cold drove consumption of utilities to new highs, the central bank explained. “Housing costs went up in 2018 as cold waves in January and the summer heat forced households to spend more on electricity and gas,” a BOK official told Yonhap.

Rent figured less prominently in housing-related outlays last year. While jeonse or long-term deposits on leased homes posted an annual growth of 1.4 percent, this was the lowest figure since 2006. Monthly rent also dropped 0.3 percent on the year, also the lowest in over a decade.

An uptick in housing costs could be a drag on households’ overall purchasing power this year, Yonhap reported, citing analysts.

To help households cut back on living costs, the government should reduce oil taxes or cut electricity rates temporarily, they suggested.