The elderly population in Korea has surpassed 10 million, and there are opinions that expanding 'home care services (visiting care)' is necessary before increasing nursing homes used by the late elderly population. Although Japan is primarily cited as a leading example of Korea's silver industry, the characteristics of Korea, where a large population lives in apartments, should be considered.
According to Samsung Securities on the 11th, the scale of Korea's silver industry has been estimated at 85 trillion won as of 2023. Among this, the scale of visiting care has reached 13.7 trillion won, showing an annual average growth of 14% from 2010 to 2023. This is the highest growth rate compared to other senior industries, including pharmaceuticals (11.7%) and finance (10.9%). The government covers up to 85% of the nursing care costs through the long-term care insurance for the elderly.
This is due to the characteristics of Korea's living arrangements. While Japan has a high number of single-family homes, more than half of Korea's population lives in apartments. Visiting care places less financial burden than building nursing facilities, and there is strong government support for its development.
Lee Kyung-ja, head of the alternative investment team at Samsung Securities Research Center, noted, "The visiting care market has been mainly formed by small local businesses, but it is now transitioning to integrated care services, with the influence of large direct management corporations expanding like in Japan."
Nursing homes (elderly medical welfare facilities) are practically facing limitations within the silver industry. Classified as medical facilities, they are subject to health insurance. Many provide outdated facilities and services, leading to decreased demand. As the number of beneficiaries expands, the financial burden has increased. It's also not easy for the private sector to build nursing homes. Operators must own the building and land since renting is not allowed. Currently, large-capital insurance companies have entered the market.
Considering the excellence of community structures in Korean apartments, there is a forecast that care-type silver towns targeting the elderly will become the trend. Currently, the baby boomer generation born between 1955 and 1969 consists of 10 million people, accounting for 29% of the total population. They possess high economic power and a significant proportion of single-person households.
However, there is a significant shortage of silver dwellings (elderly welfare housing) for the middle class. The supply of elderly welfare housing has only been 12 locations over the past 10 years. There are hardly any options apart from high-priced silver towns or elderly welfare housing provided by the government for low-income individuals. Last year, the government decided to introduce 'silver stays' for the middle class in the Guri Galmae station development area.
Yoo Seon-Jong, a professor at the real estate department of Kunkuk University, stated, "There is currently high demand for silver dwellings for the middle class, but supply is not keeping up. Additional supply of silver stays is needed in the metropolitan area, including Yongin and Gimpo."