South Korean parties promise homes, loans in steps to boost population

South Korean parties promise homes, loans in steps to boost population

By Ju-min Park and Jack Kim

South Korea's major political parties vowed more public housing and easier loans in efforts to stem population decline outlined on Thursday ahead of elections in April, aiming to allay fears of "national extinction" as fertility rates crumble.

The parties' focus on population in their election planks reflects growing alarm after spending of more than 360 trillion won ($268 billion) since 2006 has failed to reverse record low fertility rates.

With South Korea expected to become a "super-ageing" society in 2025, as more than a fifth of its population passes 65, the government projects numbers will fall to 36.2 million in 2072 from 51.6 million in 2022.

"National extinction is not something that will happen far in the future, but instead it is an imminent challenge," Lee Jae-myung, a leader of the opposition Democratic Party, said at a meeting rolling out its proposals.

South Korea projects its fertility rate, or the average number of children born to a woman, is likely to fall to 0.68 in 2024, past the figure of 0.78 in 2022, which was already a record low, the latest data show.

That compares with figures of 1.3 in Japan and 1.66 in the United States in 2021. But South Korea's woes date from 1983, when the figure fell below 2.1, the level that will ensure population replacement.

"We don't have a lot of time," President Yoon Suk Yeol said in a New Year message, referring to the population crisis.

His conservative People Power Party, in its programme to make life easier for parents, focused on longer leave and flexible work conditions, as well as tax breaks for employers to offer family-friendly working conditions.

At the April vote for a new parliament, Yoon's conservatives will try to wrest the majority from the Democrats and help boost his pro-business agenda, including tax cuts, deregulation and market reforms.

The Democrats, campaigning to retain their majority, pledged more public housing for young families and low interest loans that will be cancelled if they have children, for whom they will receive tax-free child grants through the years to high school.

"Having to choose not to have children, and there are many reasons for that, is truly a cruel reality," Lee said, adding that the focus was to put money where families say it is most needed to help them start and raise a family.

The Democrats propose to help young families become home owners by giving those with children the option of buying rental housing at rates below market priced.

Newly married couples will be entitled to low-interest loans of up to 100 million won, which will be cancelled if they have three children, with a similar amount in grants on offer, tied to the number of children.

Housing and education costs in a society where relentless competition can begin as soon as the preschool years have been cited as the reason why fewer young people get married each year and families have fewer children later in life.

The share of couples married for five years or less with no children touched a record high of 46.4% in 2022, government data shows.