House of Cards

By William Urbanski

My home country of Canada is a land of homeowners. Up in the Great White North, no figure of speech, no axiom is more ingrained into the collective consciousness than the old adage: “Paying rent is just throwing money away.” What this platitude implies is that in order to financially get ahead in life, a person must buy a house as soon as possible with no ifs, ands, buts, or maybes. This is why there is no shortage of twenty-three-year-old, unmarried, pimple-faced kids running around in a frenzy doing whatever it takes to borrow the hundreds of thousands of bucks necessary to buy a property.

Thankfully, the situation in Gwangju is much different. Sure, people love to buy houses, but this is usually reserved for later stages in life, and the decision to mortgage one’s life away usually coincides with other major life events like starting a family.

That being said, if you have spoken to one of the many, many homeowners in Gwangju lately, you have no doubt heard about how property prices, especially in certain districts, have been falling faster than the water level in Juam Reservoir. Plummeting prices accompanied by the twin boogeymen of inflation and high interest rates have many people wondering if buying a house (read: “apartment”) in Gwangju is still a solid investment.

Spoiler alert: It is not. A house that is a person’s longterm, primary residence is never a good financial investment and never has been. To boot, shifting housing preferences and the demographic realities in Gwangju might make it harder than you think to sell when the time comes.

WHAT IS NOT TO LIKE ABOUT APARTMENT LIVING?

Around Dongmyeong-dong and Gyerim-dong in southeastern Gwangju, some of the apartment prices have dropped dramatically. A reliable source told me that units in one particular apartment complex are listing in the fourhundred-million-won range when they were selling for over six hundred million won a year ago. Without getting into the complex economic reasons for this drop, it is plausible that people are getting tired of shelling out the big bucks to live on the twenty-fifth floor of yet another cookie-cutter apartment building that may or may not be of dubious construction quality. Sure, the views from up there are probably nice enough, but the reality of living so high means it takes quite a while to get to the ground floor, if you, you know, ever have to leave your home or anything like that. To boot, you will not even have your own parking spot and will have to push double-parked cars out of your way before liberating your own vehicle from its parking space. But I digress .

SINGLE-FAMILY HOUSEHOLDS

According to the City of Gwangju website (which you should really check out if you have not already), nearly 35 percent of all households in Gwangju are single-family (and therefore single-income) households. This poses a significant problem for the Gwangju housing market because most high-rise apartment units are not designed for individuals and are actually completely impractical for a single person. Even if a single person had the means to buy a 34-pyeong apartment (and that is saying something), there are many other more attractive places to live that would require less maintenance and might even offer a parking spot so you would not have to push double-parked cars out of your way at 6:00 a.m. in the morning in the middle of winter so that you can leave for work.

IS A HOUSE AN INVESTMENT?

Listen, I am not going to drone on and on about how owning a house is all bad because, of course, there are some advantages. It offers stability as well as the right to modify as you see fit. Sometimes even the location is better than you could get otherwise. But there are two major reasons why your house is not an investment. First, you have to live somewhere, and unless you plan on downsizing, you are not going to get ahead financially by selling your house. Next, people tend to conveniently forget that while they are “building equity” by paying down their mortgage, they are actually getting completely shaken down by interest payments. Think renting is throwing your money away? If a person has a (modest) two-hundred-million-won loan at 5 percent (a dream rate nowadays), that is ten grand per year that is going to magically evaporate.

Gwangju Life

Gwangju has so many interesting districts with a plethora of housing options. While housing prices are relatively high, rents are surprisingly low. So low, in fact, that I would suggest that it actually makes more financial sense to rent instead of buy. In Gwangju, renting is not throwing your money away. It is more like the deal of the century.

There are good reasons to buy a house in Gwangju. Do it because you like Gwangju and want a place here to call your own. Do it because you do not want to come home one afternoon to find your landlord slinking around your home after you explicitly told him to call you before entering. Do it because you want to paint the walls whatever color you please. Heck, even do it because you want to feel the pride of ownership. But do not do it because you think buying a house is a guaranteed investment that will pave the way to financial success.

The decision to rent or buy is never as cut and dry as it seems. While “paying rent is just throwing your money away” is taken as gospel over in Canada, there is another expression worth considering: “Stop paying rent on your house, and you will find out who really owns it.”

William Urbanski is from Canada, married, and can use chopsticks. He does not spell his middle name with a hyphen. Instagram: @ will_il_gatto

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