78% of assets over the age of 60 ‘real estate’
Cash is tight, but taxes soar, so even if you try to move to jeonse, there are no sales
Senior towns, senior welfare housing, etc.
Long-term residential attraction with limited monthly tax increases
![A gymnastics class is being held at the morning community square in Prugio Forest, Baegun Lake. [MDM]](https://wimg.mk.co.kr/news/cms/202609/16/news-p.v1.20260915.f636411331f54911bb09edf5b271520b_P1.png)
Retired generations, whose homes are mostly assets, are turning to the idea of disposing of their homes and moving them to rental senior towns. This is because it is difficult to find a lease on a deposit basis house to live stably even if the house is sold due to the shortage of lease on a deposit basis in the metropolitan area, and the burden of holding tax is increasing. The advantage of the senior town is that after disposing of the house, some of the proceeds from the sale can be turned into financial assets and can live stably for a long time.
According to the real estate industry on the 15th, a growing number of retirement generations are moving into a rental senior town or considering moving in after disposing of their own homes due to the difficulty of lease on a deposit basis and the burden of holding taxes in the Seoul metropolitan area. Instead of the traditional “downsizing” of selling houses and moving them to jeonse, senior towns are emerging as new options.
◆ I have a house, but I don’t have money to spend
According to the Household Finances and Welfare Survey of the National Statistical Office, real estate accounted for 77.6% of the total assets of households aged 60 or older last year. As most of the assets are tied to real estate, financial assets to be used for retirement living expenses are relatively insufficient. In addition, holding costs such as property tax and comprehensive real estate tax continue to be incurred.
However, it is not easy to sell the house and move it to a lease. According to KB Real Estate, Seoul’s jeonse supply and demand index stood at 179.22 last month, up 15.49 points from January (163.73). If the lease supply index exceeds 100, it means that the demand for lease on a deposit basis is higher than the supply.
According to real estate big data platform Asil, jeonse sales of apartments in Seoul also fell 12.1% from the beginning of the year. In other words, it is becoming difficult for retired generations to find a stable place to settle after disposing of their homes as the number of rental houses has decreased and the price burden has increased.
In this situation, a rental senior town is emerging as an alternative. Disposing of a house can reduce the burden of holding taxes such as property tax and comprehensive real estate tax. Among the proceeds from the sale, funds excluding senior town deposits can be converted into financial assets and used as living expenses or retirement funds.
◆Living for a long time without worrying about renewing the lease on a deposit basis
Predictability of rent is also considered an advantage. While the increase in rent for senior welfare housing is limited to a certain range, in general private leases, the right to renew the contract once is used and then exposed to market rent fluctuations when renewing the contract. The fact that it is easy to predict the cost of living for a long time during a period when lease prices rise rapidly can be an attraction to the retired generation.
However, the domestic senior housing market is still in its infancy. According to the government’s plan to revitalize senior residences, there are 12,962 senior residential facilities in Korea, with a penetration rate of only 0.12% compared to the elderly population. It is significantly lower than the U.S. of 4.8% and Japan of 2.0%.
“Baekwoon Lake Prugio Forest Morning” in Uiwang-si, Gyeonggi-do, is also a rental senior house aimed at such demand. The complex, implemented by MDM Group and operated by its subsidiary MFOR, has a total of 1,378 households, including 536 senior homes and 842 residential officetels.
Senior housing has a deposit of 500 million won to 700 million won and monthly living expenses of 3 million won. Monthly living expenses include meals, housekeeping, laundry, concierge, and other service expenses. The developer has an advantage in that it can leave a large portion of the proceeds from the sale of existing homes as financial assets because the deposit burden is lower than that of apartments in nearby areas.
The complex has community facilities such as swimming pools and fitness centers and health care centers. The operator explained that there are cases where parents and children live in the same complex because senior housing and general officetels are built together.
An industry official said, “In the past, there was a strong perception of silver town as a facility for the elderly, but recently, there is a demand to secure stable housing by cashing out assets concentrated on housing,” adding, “If the jeonse market continues to be unstable, such demand is likely to increase.”
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