Korean Job Discussion Forums

PRagic · Joined: 24 Feb 2006

1) NEVER put down a substantial amount for cheonsay if the owner has debt in and/or against the property. The OP's friend who got burned didn't do their homework. The bigger the outstanding debt, the bigger the red flag. One give away is if an apartment or unit is just too cheap to believe; there is always a reason.

2) If the owner will go for it, you can request 'cheonsay deunki', which gives you the right to force a sale should they not be able to cover your cheonsay out of pocket when you move. It puts you in the front of the line to get paid. I would want to do this now if I were in an apartment paying cheonsay of 200 million and up. No debt on the place? No problem.

3) If there is any debt, and you feel that it is not putting you in immediate danger, still always check out the order in which you move into a building. IF the property goes to auction, the bank gets paid first, then the tenants in order of longevity at the premisis.

4) In most instances, Itaewon is still about the only place in Seoul where you can get a little bit of elbow room for your rental buck (and down payments tend to be lower and more negotiable).

5) Don't buy. The housing market, particularly apartments, has quietly begun to sour. Word on the street is that once a less supportive administration gets the keys to the Blue House, prices could be in for a major tumble. This is one of the reasons that we personally are not in an apartment cheunsay now. Apartment prices on the auction market are WAY down.

It is frustrating, and a lot of the foreigners I work with quietly say that if their subsidized housing goes, they'll quit and move out of Korea. Rents are loopy and you get very little for what you pay for in terms of size, quality, and peace of mind. I've lived in 70 million won cheunsay places and in 400 million cheonsay places, but we've seldom been satisfied.

Oddly enough, the problem gets more frustrating the longer you're her and the more coin you have to dedicate to housing. Coupled with the high cost of living, it gets harder and harder to justify staying. Even at pretty lofty sums, you don't get much. So then you start thinking about what you could get somewhere else. Well, maybe that's just us.

If you have a decent enough place with decent enough owners, try to stay put. As the OP intuned, it's getting pretty ugly out there!

Stan Rogers · Joined: 20 Aug 2010

You are all seeing the fruits of a government policy of supporting property owners by keeping interest rates abnormally low.

Who's Your Daddy? · Joined: 30 May 2010 Location: Victoria, Canada.

Weigookin74 · Joined: 26 Oct 2009

I thought if you register the payment at a local dong office, you have to legally get the money back. Also, if you insure the money that ought to cover you. Interest rates are low, so you wouldn't make much money on this deposit anyways. So, it's actually a better deal for you to deposit money and have either low rent or no rent. Unless, they simply raise the Jeonse to compensate for that fact.

Swampfox10mm · Joined: 24 Mar 2011

schwa · Joined: 18 Jan 2003 Location: Yap

OneWayTraffic · Joined: 14 Mar 2005

Captain Corea · Joined: 28 Feb 2005 Location: Seoul

pegasus64128 · Joined: 20 Aug 2011

Unposter · Joined: 04 Jun 2006

Umm...rents are going up because there are too many renters because nobody is buying these days. Simple economics. Rent should continue to go up until buying makes more economic sense. I would expect rents to continue to rise in the short term.

What people aren't saying is why property values have increased so much. Part of the reason of course has been the increased economic development in Korea. Considering that Korea is not a fully developed country, there is still a good chance that real estate prices will continue to rise.

But, another reason property values have skyrocketed is because of Korea's historical propensity for savings. Until the recent housing boom, many families, especially those with middle class jobs living in Seoul had hundreds of million of won in the bank. But, instead of save it in the bank, they started pumping it into real estate, especially real estate in Seoul, thus the increase in price was inflationary due to a combination of high savings rates with sudden splurge on real estate.

IMPO, high savings rates are rarely sustainable - they are always an inflationary ticking time bomb.

Same with the growth in the U.S. stock market. All this malarky about start investing as a teen and we can all be millionaires. Sure, we might all be millionaires but a million dollars won't be worth even a fraction of what it did - it is all an inflationary time bomb.

Values are always relative. Something is valuable only if it is rare and more people want it than can have it.

In other words, there has to be losers for there to be winners. Someone has to lose.

If everyone in a country suddenly gets rich (Japan), it is doomed to failure. It can't happen.

It is part (certainly not the only reason) why there is such a huge wealth gap in the U.S.

Korea has already seen its real estate bubble burst. You can see it all over the countryside and the medium sized cities where economic opportunities are few and people can't wait to move.

Seoul is a different story. People want to live there and there really isn't any other place to move to (if you already own a home) except to another country. It is Seoul. It is where all the action is and it is where most people want to live.

Prices have gone done some in less demand locations (in Seoul) but I wouldn't expect to see prices fall much farther. It is all location, location, location.

Even Gyeonggi-do, especially near Seoul, can be pricey as well.

I think it will be hard for your average English teacher to ever own a home in Seoul anymore than you will find too many teachers living in Manhatten or a similar place in London etc...

If you do plan to put down for cheonsae, I would strongly recommend taking some of the advice here and fully investigate the land lord and avoid anyone with debt. Also, you need to register it with the local dong office and insurance is generally a good idea. If you do those things, in most cases, you should be okay.

You may not want to believe it, and while I think Seoul will continue to be developed, it is still a major leauge city, it is the capital and main city, where all the action takes place, in one of the ten largest economies of the world. You may not see it but there is plenty of money coursing through the city.

pegasus64128 · Joined: 20 Aug 2011

cdninkorea · Joined: 27 Jan 2006 Location: Seoul

Died By Bear · Posted: Sun Mar 04, 2012 11:06 am Post subject:

Zyzyfer · Posted: Sun Mar 04, 2012 4:20 pm Post subject:

I've been considering doing the whole bank loan/deposit thing in the near future but was already hesitant. This thread only reinforces that.

Although if moving outside of Seoul really is trending right now, I'm a little concerned. My alternative if I continue to stay in Korea beyond the next two or three years is to take a place out in the 'burbs, since once you get out of Seoul, prices start to become much more reasonable.