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Lucas
Joined: 11 Sep 2012
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 Posted: Wed Nov 27, 2013 5:54 pm Post subject: |
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| Buy gold, Buy gold! |
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Stan Rogers
Joined: 20 Aug 2010
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| Posted: Thu Nov 28, 2013 1:47 am Post subject: |
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| Back in the early-mid 2000's everything everywhere was going up. Where you bought didn't matter. It does now. It's all about location, location, location. I don't expect to see prices drop too much, but many places will stagnate for a long time. If you are buying as an investment you need to be very selective now. |
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NohopeSeriously
Joined: 17 Jan 2011
Location: The Christian Right-Wing Educational Republic of Korea
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| Posted: Thu Nov 28, 2013 7:20 am Post subject: |
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| It has been burst without any huge public notice. |
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mr_thehorse
Joined: 27 Aug 2013
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| Posted: Thu Nov 28, 2013 7:59 am Post subject: Re: Korean housing bubble soon to burst? |
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| chaz47 wrote: |
I've been hearing that the Korean housing bubble is soon to burst. This makes me leery of keeping my savings here in the ROK. Now, mind you I definitely do not see the US as a safe haven for my acorns either.
What do you guys think? Where is a good place to stash cash internationally?
I have been considering Thailand as I'll probably end up there eventually anyway in years to come. And also, being a primarily tourism-based economy, aren't they likely to weather most economic downturns fairly well? I mean, not all the world's economies are likely to bottom at the same time and tourists from all over the world flock there. So, while not a 'powerhouse' economy, my guess is that it's pretty stable.
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Here is what i'm watching for. When Japan blows up from their efforts to create inflation, and devaluing the yen backfires (and it will...) that is when the bubble in Korea bursts.
As much as Korea hates Japan, being the 3rd largest world economy implode will cause shockwaves larger than 2008.
That being said, as it stands now...Skies are clear. Carry on, and only begin to worry when the yen/usd starts to fall quickly. |
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GoldMember
Joined: 24 Oct 2006
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| Posted: Sat Nov 30, 2013 7:28 am Post subject: |
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| Foreign currency "reserves" are actually "claims", denominated in a foreign currency. The Korean central banks greatest proportion of "claims" is on US treasuries. Those claims are useless unless they can be liquidated (that is find another buyer). The actual value of those claims would fall dramatically if an attempt was made at liquidation. The US govt isn't about to buy them. If they could it would be at a huge discount to face value. In other words, the reserves consist of a huge bunch of iou's that when matured are then payed out with another bunch of iou's. |
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Malislamusrex
Joined: 01 Feb 2010
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| Posted: Sat Nov 30, 2013 3:57 pm Post subject: |
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A large portion of the houses in Korea are owned by investors. They want to make a profit on their investment. Most tenants are happy with the Jeonse system because they know they are able to cash in after 2 years. Landlords at some point will move to the traditional paying rent system to make up for the fact they thought interest rates were going to remain high forever. When that happens tenants and young people will simply stay in their parents home and build up cash reserves. Then there will be a large decline in house prices.
In the UK you can expect to get a return of 450k per month 100 million won.
In Korea landlords expect 700k+ per month for 100 million won.
It just doesn't make sense as a return on an investment or financially for tenants. |
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Lazio
Joined: 15 Dec 2010
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| Posted: Sun Dec 01, 2013 5:10 am Post subject: |
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| Malislamusrex wrote: |
In the UK you can expect to get a return of 450k per month 100 million won.
In Korea landlords expect 700k+ per month for 100 million won. |
Most places provide about 5% of the market value yearly give or take 0.5%. Very few places provide a return of near 6% and almost none above that. One room apartments might go a little higher but nowhere near the 8.4%+ you mentioned in your example. They come partially furnished and equipped with some appliances and some other perks (internet, water electricity included etc.) so that pretty much eats the little extra rent. |
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Popocatepetl
Joined: 14 Oct 2013
Location: Winter in Korea: One Perfect day after another
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| Posted: Sun Dec 01, 2013 5:49 am Post subject: |
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Too much unneeded real estate construction when there's no demand.
Long overdue to end the bricks and mortar infrastructure economy and start investing in quality of life issues like social justice and education. |
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Malislamusrex
Joined: 01 Feb 2010
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| Posted: Sun Dec 01, 2013 7:39 pm Post subject: |
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I'm not saying that's what they go for but that's what landlords expect to cover their mortgages. I went to look at a place for 200,000,000. They wanted 1.4 million a month, a total of 16.8 million a year. If they put the same in the bank, they would end up with 6.4.
Interest doesn't cover their investment and tenants wont pick up te extra bill.
| Lazio wrote: |
| Malislamusrex wrote: |
In the UK you can expect to get a return of 450k per month 100 million won.
In Korea landlords expect 700k+ per month for 100 million won. |
Most places provide about 5% of the market value yearly give or take 0.5%. Very few places provide a return of near 6% and almost none above that. One room apartments might go a little higher but nowhere near the 8.4%+ you mentioned in your example. They come partially furnished and equipped with some appliances and some other perks (internet, water electricity included etc.) so that pretty much eats the little extra rent. |
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Stan Rogers
Joined: 20 Aug 2010
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| Posted: Mon Dec 02, 2013 12:07 am Post subject: |
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| I have to laugh at how many foreigners there are who do not understand the Jeonsae system. It's a very good deal for some landlords. Really guys, ask a Korean to explain it to you. |
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