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atwood
Joined: 26 Dec 2009
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 Posted: Sat Mar 16, 2013 6:39 pm Post subject: |
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| slothrop wrote: |
what do you guys think about these "lotteries" where people win the right to buy an apartment before construction even starts? there are a few large developments near where i live that have stopped builiding and gone bankrupt. but there is one that finished and it's value has, supposedly, shot up like 30% in the past 2 years.
i've heard from a real estate agent(not looking to buy, just chatting while looking for a rental) that these days the larger 40 and 60 pyoung apt.s don't sell, and that families(these days getting smaller) generally want 30 pyoung to keep maintenance and energy costs low. was also told the "new hot investment" is buying one room studio apartments to rent to the 20's crowd that's still single yet doesn't want to live with their parents. thoughts? |
This jibes which what I've been hearing regarding the larger apartments. But I think it's more about buying cost than size requirements maintenance, etc.
Builders misjudged how much average Koreans could/would spend on an apartment, especially when the economy slowed down. Forty pyung isn't really that big. |
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Stan Rogers
Joined: 20 Aug 2010
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| Posted: Sat Mar 16, 2013 7:41 pm Post subject: |
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| atwood wrote: |
| slothrop wrote: |
what do you guys think about these "lotteries" where people win the right to buy an apartment before construction even starts? there are a few large developments near where i live that have stopped builiding and gone bankrupt. but there is one that finished and it's value has, supposedly, shot up like 30% in the past 2 years.
i've heard from a real estate agent(not looking to buy, just chatting while looking for a rental) that these days the larger 40 and 60 pyoung apt.s don't sell, and that families(these days getting smaller) generally want 30 pyoung to keep maintenance and energy costs low. was also told the "new hot investment" is buying one room studio apartments to rent to the 20's crowd that's still single yet doesn't want to live with their parents. thoughts? |
This jibes which what I've been hearing regarding the larger apartments. But I think it's more about buying cost than size requirements maintenance, etc.
Builders misjudged how much average Koreans could/would spend on an apartment, especially when the economy slowed down. Forty pyung isn't really that big. |
The average wage in Korea has not kept pace with the rise in housing costs. When that happens something has got to give.
Also a lot of the properties that were purchased were bought by people who had no intention of ever living in them. |
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atwood
Joined: 26 Dec 2009
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| Posted: Sat Mar 16, 2013 10:20 pm Post subject: |
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| Stan Rogers wrote: |
| atwood wrote: |
| slothrop wrote: |
what do you guys think about these "lotteries" where people win the right to buy an apartment before construction even starts? there are a few large developments near where i live that have stopped builiding and gone bankrupt. but there is one that finished and it's value has, supposedly, shot up like 30% in the past 2 years.
i've heard from a real estate agent(not looking to buy, just chatting while looking for a rental) that these days the larger 40 and 60 pyoung apt.s don't sell, and that families(these days getting smaller) generally want 30 pyoung to keep maintenance and energy costs low. was also told the "new hot investment" is buying one room studio apartments to rent to the 20's crowd that's still single yet doesn't want to live with their parents. thoughts? |
This jibes which what I've been hearing regarding the larger apartments. But I think it's more about buying cost than size requirements maintenance, etc.
Builders misjudged how much average Koreans could/would spend on an apartment, especially when the economy slowed down. Forty pyung isn't really that big. |
The average wage in Korea has not kept pace with the rise in housing costs. When that happens something has got to give.
Also a lot of the properties that were purchased were bought by people who had no intention of ever living in them. |
Agreed on both cases.
It wouldn't surprise me if the chaebols etc. weren't squeezing employees the same way many universities are squeezing instructors. |
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PatrickGHBusan
Joined: 24 Jun 2008
Location: Busan (1997-2008) Canada 2008 -
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| Posted: Sun Mar 17, 2013 7:08 am Post subject: |
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| atwood wrote: |
| Stan Rogers wrote: |
| atwood wrote: |
| slothrop wrote: |
what do you guys think about these "lotteries" where people win the right to buy an apartment before construction even starts? there are a few large developments near where i live that have stopped builiding and gone bankrupt. but there is one that finished and it's value has, supposedly, shot up like 30% in the past 2 years.
i've heard from a real estate agent(not looking to buy, just chatting while looking for a rental) that these days the larger 40 and 60 pyoung apt.s don't sell, and that families(these days getting smaller) generally want 30 pyoung to keep maintenance and energy costs low. was also told the "new hot investment" is buying one room studio apartments to rent to the 20's crowd that's still single yet doesn't want to live with their parents. thoughts? |
This jibes which what I've been hearing regarding the larger apartments. But I think it's more about buying cost than size requirements maintenance, etc.
Builders misjudged how much average Koreans could/would spend on an apartment, especially when the economy slowed down. Forty pyung isn't really that big. |
The average wage in Korea has not kept pace with the rise in housing costs. When that happens something has got to give.
Also a lot of the properties that were purchased were bought by people who had no intention of ever living in them. |
Agreed on both cases.
It wouldn't surprise me if the chaebols etc. weren't squeezing employees the same way many universities are squeezing instructors. |
A lot of this is true. It will put pressure on the market.
It is also what happened in a lot of Canadian markets where real estate ballooned and outstripped income growth for average families. |
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slothrop
Joined: 03 Feb 2003
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| Posted: Sun Mar 17, 2013 11:41 pm Post subject: |
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edit
Last edited by slothrop on Sun Apr 07, 2013 3:56 am; edited 1 time in total |
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atwood
Joined: 26 Dec 2009
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| Posted: Sun Mar 17, 2013 11:50 pm Post subject: |
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| slothrop wrote: |
more on the 'happiness fund'.... it's for people who haven't even been able to make the interest payments on their debts for at least 6 months.LOL
http://www.koreatimes.co.kr/www/news/opinon/2013/03/202_132240.html
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| The fund will buy debts owned by banks and other financial firms that have been in arrears for more than six months as of the end of February. As a result, people with total debts of less than 100 million won who failed to pay the interest on their loans before last August will be eligible to apply for the fund, a move aimed at defusing moral hazard among borrowers. The number of such households is estimated to be 1.12 million but less than that are expected to apply for the scheme. |
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Less than 100 million won probably wouldn't apply to people speculating on real estate.
They just need to repossess their BMWs and Prada handbags. Although nothing can be done to recoup the money spent on Estee Lauder and the like. |
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sendittheemail
Joined: 15 Oct 2008
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| Posted: Mon Mar 18, 2013 12:02 am Post subject: |
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| The fund will buy debts owned by banks and other financial firms that have been in arrears for more than six months as of the end of February. As a result, people with total debts of less than 100 million won who failed to pay the interest on their loans before last August will be eligible to apply for the fund, a move aimed at defusing moral hazard among borrowers. The number of such households is estimated to be 1.12 million but less than that are expected to apply for the scheme. |
How did these folks qualify for loans if they can't even service the interest on less than 100k worth of debt? What's more worrying is that despite relatively low wages, and relatively high prices, and world-record setting household debt, construction firms continue to borrow money from banks to build, build, build new apartments in new towns all over the outer areas of Seoul. And last time I checked, Korea's birthrate was plummeting. All these new apartment buildings popping up, being constructed on borrowed money, don't really jive with the average Korean household's fiscal situation.
The only way these expensive apartments in brand new buildings are going to fill up is if banks continue to loan money to people who shouldn't really be borrowing money in the first place, whether they be the new-home buyers, of the buyers of the old apartments left behind by people who finance their ways into one of the brand new buildings. A lot of construction firms are offering people "deals" where they can move into new apartments by putting a 60-100k deposit on the place for 3 years, and if they don't like it, they can get their money back. This is due to the fact that the construction firms can't pay the interest on their own debt either, and they are hoping that by collecting 3 year "try before you buy" deposits, that they might be able to keep the whole scheme afloat for a little while longer before defaulting. Of course for the renters, in order to get their money back, the construction firm must actually still be in business after 3 years, and when it comes to settling debts, if these apartments are forced to auction, the banks that funded the construction will be in line for repayment before the apartment depositors will, and the depositors may have to fall back on the government's 50k 'jeonse' insurance, and simply eat the rest of the loss should the construction firms start to fold. |
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PRagic
Joined: 24 Feb 2006
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| Posted: Mon Mar 18, 2013 10:17 pm Post subject: |
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My wife and I have been following the Seoul real estate market religiously for twenty years. It is BAD now, and I mean BAD. Some previously affluent blocks are down 30-50% and people STILL aren't biting. The new jumbo high rise at Hapjeong is still ONLY at 90% occupancy. Remember that success is likely if all of the units are sold out even before construction begins here!
In some areas, they are offering a new car to anyone who buys. A car! Take a look around you. Have you noticed that real estate places are going belly up by the hundreds by the day. Well, not that they even did anything to justify the money they made to begin with, but it is none-the-less a sign of the times. Nobody is selling overtly (that 'don't tell anyone what you paid' is the norm now) and virtually nobody, at least in Seoul, is buying. Everyone is waiting to see just how low it goes, and this means that prices will continue to drop.
Units at auction are in free fall. And I don't want to say I called it, but look back through some of my old posts on this. This is going to have long run repurcussions given the socio-economic implications for families and wealth. We lived in a named, high income high-rise on chunsae and got the heck out. Recently, a couple of units in the exact same apartment have gone at auction for a hundred million less than were were paying for chunsae. Yikes!
So if the OP bought at a 15% discount, he/she may have done OK depending on the location and IF they have absolutely no intention of living anywhere else for the next 20 years. We all have to live somewhere.
We bought a chunck of land back in the throws of the 97-98 financial crisis at a hugely deflated price and that has worked out pretty well for us. If the real estate market bubble pops in Seoul, we'd be tempted to buy a unit or two on the cheap if the price were right, maybe a couple of officitels on a main strip or something.
Just my 2 cents. To each their own... |
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madoka
Joined: 27 Mar 2008
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| Posted: Tue Mar 19, 2013 12:27 am Post subject: |
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| slothrop wrote: |
| more on the 'happiness fund'.... it's for people who haven't even been able to make the interest payments on their debts for at least 6 months. |
Is it just me or does this happiness fund encourage people to be reckless with their money since the government is always there to bail them out?
�The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money.�
- Alexis de Tocqueville
�When the people find that they can vote themselves money, that will herald the end of the republic.�
- Benjamin Franklin |
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slothrop
Joined: 03 Feb 2003
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| Posted: Tue Mar 19, 2013 12:41 am Post subject: |
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edit
Last edited by slothrop on Sun Apr 07, 2013 3:57 am; edited 1 time in total |
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liveinkorea316
Joined: 20 Aug 2010
Location: South Korea
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| Posted: Tue Mar 19, 2013 3:37 am Post subject: |
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I don't know why you would say housing prices are BAD if they are down 30-50%. That is a great thing for all graduates in Korea. They need jobs and houses.
House owners tend to be one of the most selfish and wealthy segments of society. You don't deserve the price on your house to rise at all. Your rise is a direct cost to the young person who must buy it from you. Your need for housing gains is therefore just a selfish thing |
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atwood
Joined: 26 Dec 2009
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| Posted: Tue Mar 19, 2013 5:41 am Post subject: |
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| liveinkorea316 wrote: |
I don't know why you would say housing prices are BAD if they are down 30-50%. That is a great thing for all graduates in Korea. They need jobs and houses.
House owners tend to be one of the most selfish and wealthy segments of society. You don't deserve the price on your house to rise at all. Your rise is a direct cost to the young person who must buy it from you. Your need for housing gains is therefore just a selfish thing |
Why shouldn't someone profit from their investment?
Describing home owners as wealthy is a gross over-generalization. |
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slothrop
Joined: 03 Feb 2003
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| Posted: Tue Mar 19, 2013 6:08 am Post subject: |
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edit
Last edited by slothrop on Sun Apr 07, 2013 3:57 am; edited 1 time in total |
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atwood
Joined: 26 Dec 2009
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| Posted: Tue Mar 19, 2013 2:55 pm Post subject: |
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| slothrop wrote: |
| atwood wrote: |
| Describing home owners as wealthy is a gross over-generalization. |
indeed. some home owners have less equity than a homeless bum. there in lies the problem. |
There are plenty of middle class homeowners who own their homes free and clear and pay their credit card bills. |
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slothrop
Joined: 03 Feb 2003
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| Posted: Tue Mar 19, 2013 5:40 pm Post subject: |
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edit
Last edited by slothrop on Sun Apr 07, 2013 3:57 am; edited 1 time in total |
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