hankyoreh

An apartment complex in Seoul’s Songpa District

While the prices of most farming, seafood, and industrial products and other consumer goods have remained lower than the rise in per capita GDP over the past 40 years, large increases were observed in the selling prices and key money deposits for apartments in Seoul as well as coffee and other indulgence items, an analysis shows.

On Mar. 29, the Hana Institute of Finance (HIF) published a report titled “Analysis of Price Trends in Major South Korean Goods and Services: 1980-2020,” which included a comparative analysis of the nominal price trends for various goods and services relative to the economic growth rate since 1980.

According to the report, the rate of increase in nominal prices for both consumer goods -- including farming, fishing, and industrial products -- remained lower than the per capita GDP growth rate over this period, with the result that the real price as perceived by consumers decreased. The prices of most foods increased by less than nine times, including a 3.2-fold increase in the price of rice from 3,000 won (US$2.45) to 9,500 won (US$7.77) per 4 kg and a 3.3-fold increase in the price of chicken from 1,400 won (US$1.14) to 4,656 won (US$3.80) per kilogram. The price of a mid-size domestically produced automobile rose by 6.1 times from 3.89 million won (US$3,179) to 23.9 million won (US$19,530), while the prices of soju and a movie ticket respectively rose by 5.1 and 6.7 times. Given the per capita GDP growth rate over this period -- 35.5 times by won value, 18.5 times by US dollar value -- the perceived price remains low, the institute concluded.

In contrast, items such as watermelons (16.7 times) and cabbage (12.5) showed relatively higher rates of price increase than other food items. The price of apartments in Seoul’s Gangnam area stood in particularly sharp contrast to other items analyzed, with the selling price for a unit in the Eunma Apartment Complex rising by 84 times from 770,000 won (US$629) to 64.69 million won (US$52,877) per 3.3 square meters and the key money deposit price rising by 101 times from 160,000 won (US$131) to 16.29 million won (US$13,315). The prices of indulgence items also increased substantially, with the cost of a cup of coffee rising by 21 times from 200 won (US$.016) to 4,100 won (US$3.35) and the cost of a pack of cigarettes rising by 15 times from 30 won (US$.025) to 4,500 won (US$3.68).

“It was quantitatively confirmed that real prices have declined for most major consumer goods over the past 40 years,” said Jung Hoon, a research fellow at HIF.

“But since the figures in the analysis were based on average costs, there could be some differences with the perceived prices for low-income demographics in consideration of the recent intensification of income polarization,” he added.

By Park Hyun, staff reporter

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