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Why Seoul’s 5th Quintile PIR is ridiculously high

Seoul’s 5th quintile (top 20%) market operates on a completely different mechanism than other OECD cities.

① Income Ceiling vs. Housing Price Infinity NY/London: Even within the top 20%, the ultra-high earners (Top 1%) are often finance/legal/tech elites earning billions (or tens of billions) KRW annually. Their massive income bumps up the denominator, lowering the PIR. Seoul: Korea’s top 20% (major company execs, doctors, lawyers) are clustered in the 200M–500M KRW salary range. While the income ceiling is clear, Gangnam apartments easily pass 3B–5B KRW, causing the ratio (PIR) to skyrocket.

② Nature of 5th Quintile Housing (Living vs. Investing) Overseas: 5th quintile housing is mostly a consumer good focused on 'Luxury Living' satisfaction. High maintenance/holding costs make it less appealing as an investment. Seoul: 5th quintile apartments (new Gangnam places) are considered the 'safest asset in the Republic of Korea' and a 'means of wealth transfer.' A premium for 'hedging against currency devaluation' is added to the living value, making the price extremely sticky.

③ Loan (LTV) vs. Gap (Gap Investment) Overseas: Even expensive homes are strictly purchased using income-based loans (DTI/DSR). No income means no buying. Seoul: Even with tight loan regs, the 'Jeonse' system acts as private financing. Many 5th quintile buyers enter the market not based on their income, but by selling previously held assets or leveraging the Jeonse deposit (Gap Investment). Basically, the connection between income and housing price is severed.

Conclusion and Implications

“Seoul’s 5th quintile (top tier locations) is the domain of 'Capital,' not 'Labor.'” As of 2025, the overwhelmingly high 5th quintile PIR in Seoul according to OECD stats suggests that the structure of Korean society prevents even 'high-income laborers' from entering the top residential areas purely through earned income. Seoul's 5th quintile market is no longer a 'salary battle' but a fight over 'who inherited more assets' or 'who acquired assets earlier,' cementing its status as the most closed-off market with the highest entry barrier among OECD nations. Gangnam prices, which send Tokyo and Manhattan to the next dimension, make you wonder (hmmm...teresting) how long they can last~