Korean Job Discussion Forums

[Swampfox10mm]

Just a note to the individual who said he's sure property can be had for a good price because he'd lived in a place that cost 100 million years back.

Our place sold new for 80 million in 2006. It's now worth 3 times that. How do I know? Not because that's what I hear it's worth. It's because that's what we PAID for it a few months ago. Just an interesting side note, they were originally asking almost 50 million more than that, because "they'd heard that's what it should go for." Well, reality hit them pretty hard with that one. And interestingly, the real estate people warned us heavily not to tell anyone in the area what we paid, or they would get mad at us, because it was far less than what they "expect" the place should get.

This is a common occurrence in the real estate world here.

So, to that poster, your former 100 million won place might be thought of as valued at 350 million now, but might actually be able to sell for 300 million.... who knows?

And on the subject of real estate values... nobody knows what their home is worth until it sells. For example, you could own a place you hear is worth 1 billion won, but unless you're in a very prime location, nobody is going to pay that. These properties are the ones which will take the biggest hit in a bubble-bursting situation, and owners living on the belief that they are going to actually get that 1 billion won for their home (unless they are prime, prime area homes) are in for a shock.

A real estate friend near Ichon said people ask 800,000,000 and up for their homes these days, but he's seen them sell for as little as 400,000,000 when it comes to brass tacks.

There will always be people who "have to move now."

[Unposter]

What that article doesn't tell us is where those people are living and what there current housing is.

Chances are that most of the people in the low income areas are living outside of Seoul/Gyeonggi-do (at least the areas touched by the subway).
And, many of them live in housing that has belonged to their family for a generation or more.

So, if you go back to the previous article, there are radically different housing markets in Seoul and outside of Seoul. Even Busan, according to that article, has significantly cheaper housing than Seoul does.

Of course, a large reason for this discrepency is salary and demand. If you have the money/income and you want to live in one of the better neighborhoods of Seoul, you will pay a little more. But, if you do not have the cash or you do not want to live in such a neighborhood, you live some place else. There are cheaper housing options in Seoul. I have lived in one - most English teachers live in them - My inlaws live in them.

Now, I understand that you may not personally consider them, "nice." I don't either.

But, I think some of the ideas of housing bubbles in Seoul/Korea are a little over-stated. I understand that it can be easy to forget that there are poor people living in Korea. But, it is also easy to forget that there are some really rich people living in Korea. And, it should not be surprising that there are a few neighborhoods that reflect that kind of money.

Also, do not forget the huge under-ground economy in Korea and bonuses. A lot of income is under-reported in Korea and one has to assume that there is actually more money running around the country than is actually reported to the government.

So, just because not everyone can afford to live in Gangnam or some of the other better neighborhoods doesn't mean that there is necessarilly a housing bubble.