Korean Job Discussion Forums

[Real Reality]

Rental Apartment Prices Still Rising
Mr. Kim, an office worker, visited, in vain, quite a few real estate agents around the Poonglim I-one Apartment Complex in Wolgye-dong, Nowon-gu, Seoul to rent a house on September 15. He thought the house prices would go down sooner or later as the government announced a policy to control the price increases two days ago.

When Mr. Kim visited the agents again on September 29, however, the price of a 31-Pyeong house (1 Pyeong equals about 3.3 square meters) on deposit rose to 175 million won, up 30 million won from 147.5 million 2 weeks ago.
Donga.com (September 30, 2006)
http://english.donga.com/srv/service.php3?biid=2006093053928

[Juregen]

This is actually quit a normal reaction


Governemt: Hey we are going to do something about you earnign too much money

People: hmmm i better make a quick buck before they start moving...

[Real Reality]

Apartment Rental (note: not owning, not buying)
price of a 31-pyeong apartment (1 pyeong equals about 3.3 square meters)
deposit rose to 175 million won,
up 30 million won from 147.5 million 2 weeks ago.
Donga.com (September 30, 2006)
http://english.donga.com/srv/service.php3?biid=2006093053928

175 million Korean won = 205,373 Canadian dollars
175 million Korean won = 184,752 American dollars

[Real Reality]

Apartment prices creeping upward
Despite the government's efforts to stabilize the housing market, apartment prices in Seoul and other major residential areas are showing signs of picking up, industry sources said yesterday.... In Gangnam, in particular, where old apartment buildings slated for reconstruction have long been the prime target of cash-rich speculators, the price of a 13-pyeong apartment unit built by Korea National Housing Corp. soared more than 30 million won ($31,330) after a long holiday early this month. (1 pyeong equals 3.3 square meters.) It now hovers around 710 million won ($741,590), which is higher than the "pre-March 30 level," or before the government unveiled a package of taxation measures aimed at curbing real estate speculation.
By Lee Sun-young, Korea Herald (October 23, 2006)
http://www.koreaherald.co.kr/SITE/data/html_dir/2006/10/23/200610230046.asp

[jmbran11]

The market will charge whatever people will pay. It's simple supply and demand. Why shouldn't landlords charge more if dwellers are willing to fork it over?

[Ilsanman]

What does the average Korean earn? $16,000 a year or so?

How can they expect this sytem to continue? People at that wage could work their entire life and still not even own the shitbox they live in. It's freaking ridiculous.

The average Canadian makes about $28,000 a year and my wife and I just bought a house for $150,000. Sounds a lot more reasonable.

[PRagic]

This is where they are going to bite themselves in the arse. Most of the people living in these 1 million plus (US dollar), 32 pyung places only put down 20-40 percent and are financing the rest. This may have been fine when, a couple of buy-sell rounds ago, prices were still around half a million USD. They are fast approaching the bubble burst scenerio, as rents cannot possibly keep up with purchase costs and financing. If this economy burps, and some people lose their jobs, and therefore their capacity to pump everything they own into an apartment that they wistfully would like to sell off for a profit, things could get dicey, especially if nobody is buying. This economy has been sustained on increasing domestic debt, undertaken largely based on a perceived income effect from real estate values.

We had planned on buying a house or small building, but are now waiting to see what will happen. As it stands, it's better to just throw a couple hundred K down on a spacious 'chunsay' place and then invest abroad.

[PRagic]

And just as a last aside...

University salaries have been decreasing or stagnant at best, and most places are still offering 300K for housing, the same amount that was offered TEN YEARS AGO!

[Ilsanman]

I accept 300,000 for housing because I can find a place for less than that.

I have noticed university deals are getting worse, mostly with longer hours and less vacation.

[Yeolchae]

At least in the future we might be able to figure out how the prices compare without a calculator.

[PRagic]

IlsanMan, you CAN find a place for UNDER 300 thousand? Yikes. Either you are paying a load of key money, or you have remarkably low living standards! How many Pyung do you have? Is the bathroom attached?

[JeJuJitsu]

Crazy. My head teacher, I guess he'd be like the Assistant Principal, just bought a $2.2 million dollar apartment in Pangyo. A teacher. With a $2+ million dollar apt.
He does however, intend on selling it, he thinks, for about 4+ million in 3-years.

Running a simple housing-affordability calculator (25% downpayment), in North America, one would have to make $42,000 a MONTH to afford a $2+ million house. I don't even see how he can afford to make the $20,000/monthy payments, as his monthly salary is only about 15% of his monthly house payment.

What is going on here?

[Beej]

I thought Koreans needed a 50-60% down payment to quailify for a mortgage?

[Thunndarr]

[dogbert]