(TrendHub KR – Posts by ICARUS Reporter) The Seoul Metropolitan Council recently unveiled a groundbreaking approach to address the city’s severe low birth rate issue. This strategy, which includes eliminating income criteria, aims to tackle various aspects of the low birth rate dilemma. This move comes as Seoul recorded the lowest fertility rate in the nation in 2022, with 0.59 births per woman, and over 60% of public elementary schools in Seoul reported having fewer than 100 new students.
Kim Hyun-ki, the Chairman of the Seoul Metropolitan Council, emphasized the significance of this initiative, proposing the ‘Seoul Model for Overcoming Low Birth Rates.’ The core of this model is the removal of all income-based restrictions to enhance the effectiveness of low birth rate policies. This aims to address the exclusion of young dual-income couples from various policies, including easing income criteria for public housing eligibility, expanding the target for rent deposit interest support, and broadening the support scope for the Seoul Childcare Benefit.
Additionally, the Council plans to prioritize allocating 4,000 public rental housing units to newlywed and expectant families. This figure corresponds to about one-third of childless newlywed couples in Seoul, aiming to provide housing support regardless of income.
The Council is also considering extending support for children up to 18 years, significantly expanding the current focus on children aged 0 to 8. Plans include continuing child allowances up to 18 years with monthly payments of 100,000 KRW, providing pregnant women with transportation subsidies of 700,000 KRW, and introducing a parental allowance of 50,000 KRW per month.
Although these proposals have not been pre-discussed with the city administration, Chairman Kim highlighted the Council’s legislative and budgetary powers to implement these measures. The estimated annual budget for these low birth rate countermeasures is projected to be between 440 billion and 490 billion KRW.
Investment Insights
This bold set of measures against low birth rates could significantly alter Seoul’s residential and social landscape. The expansion of public housing and rent support will directly impact the real estate market. Increased housing stability for middle-class and younger generations is expected to positively influence the real estate and construction industries. Additionally, the education and childcare sectors could see new opportunities. Extending support up to 18 years may lead to increased long-term demand for educational and childcare services, fostering growth in these industries.
However, the effectiveness of these measures in solving the low birth rate issue remains uncertain. The implementation of the Seoul Metropolitan Council’s proposals into actual policy will require various processes and negotiations, which might lead to adjustments. Therefore, investors should continuously monitor news related to these policy changes, adopting strategies to predict and respond to market shifts from a long-term perspective.
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