A man takes a photo of Seoul's skyline from Mt. Nam, April 21. Newsis

Recent data shows that the number of people purchasing a house for the first time reached 92,100 in the first quarter of 2024, a 35 percent increase compared to the same period last year.

Notably, those in their 20s and 30s accounted for 55 percent, the highest proportion in three years since the first quarter of 2021. People in their 30s have overtaken those in their 40s, who were previously the top age group for buying a property, to become the leading age group.

The news left Lee Ki-beom, a 31-year-old office worker who moved to Seoul when he started college, with bitter feelings.

"I am currently in my 30s, but buying a house is a distant dream. House prices are on another level," Lee said. "I have looked into bank loans, but there are limits to how much debt one can take on," he said.

"How are they managing to finance their homes?"

Including Lee, many believe that a significant number of young people have incurred excessive debt to profit from generally increasing housing prices.

However, recent analysis presents different perspectives. It indicates that more buyers in their 20s and 30s have either used sufficient personal funds or received financial support from their families that exceed tax-free limits.

A person walks by a real estate brokerage office in Seoul, March 17. Yonhap

In the analysis titled "Analyzing the Reality of Young Soul-Scraping Homebuyers," Hong Jeong-hoon and Lim Jae-man from Sejong University explained that from 2020 to 2022 – the period of rising house prices – only 1,098 buyers in their 30s used excessive financing, while 4,497 purchased homes without any debt. Additionally, more than 7,000 buyers received over 150 million won ($109,561) from their families to purchase homes.

A similar trend is observed among buyers in their 20s. While only 660 resorted to excessive financing, 4,713 buyers were among the top 20 percent of net asset holders, and 1,644 received over 150 million won in support from their families.

The researchers utilized the current debt service ratio (DSR) regulation to gauge excessive financing. Following the regulation, they evaluated that if the principal and interest payments on loans exceed 40 percent of a borrower's annual income, considering total debts over 100 million won, posed excessive debt demands.

"Since 2020, significant disparities have emerged within the same generation in the housing market, and asset transfers exceeding tax-free limits have been occurring between parents and young people," the authors wrote.

A real estate broker based near Ahyeon Station in Seoul observed that most home buyers in their 20s and 30s are often accompanied by their parents when purchasing houses.

"Most of the time, it's the parents who call me to make inquiries, not the home buyers themselves," she noted.

Residents in Gangnam District listen to a presentation about real estate tax at a community hall in Seoul, April 24. Yonhap

Kim In-man, the head of Kim In-man Real Estate and Economics Institute, explained that preparing housing for their children has become a crucial task for the older generation, those in their 50s and 60s.

"They consider a small apartment in Seoul as a basic safety net for their children's uncertain future," Kim stated.

The proportion of gift transactions, another form of wealth transfer in the real estate market, is on the rise as well.

In 2011, gift transactions made up 2.94 percent of all apartment transactions. This figure rose to 3.68 percent in 2017 and 5.37 percent in 2023. This trend has continued into 2024, with gift transactions accounting for 5.85 percent of the total from January to March. If unreported gift transactions were included, this ratio could be even higher.

The trend is fueled by the government's policies aimed at enhancing the younger generation's purchasing abilities. For instance, parents can gift up to 150 million won for marriage or childbirth (300 million won per couple) without incurring gift tax.

"We should focus more on the transfer of assets facilitated by parental support and its impact on the housing market," Shim Hyung-seok, director of the Woodaebbang Real Estate Corporation Group, said.