Korean Job Discussion Forums

[baedaebok]

Is it a good time to invest in property in Korea? I heard that with the new government, the tax laws may be changing.

Where can I get English info about investing in property in Korea (online)?

[uberscheisse]

everything i've ever heard (mostly anecdotal) has said that you have to at least be married to a korean to be allowed to buy property in korea.

[Kuros]

Talk to a lawyer. This is not the right place to get this kind of advice.

[baedaebok]

I doubt forum advice is reliable by itself. But forum advice can start a lead that will direct me to where I can get accurate info.

I'll contact a lawyear or real estate brokers. But I thought the latter are all independent and don't belong to large companies (like Royal LaPage, Century 21, etc.)

My wife is Korean so all the property would be in her name. We think Korea is a solid investment.

Investing in real estate and renting it out is like using other peoples' money for your own life. It's the best way to really make money (outside of working).

[Unposter]

As far as I understand, you don't need to be married to a Korean in order to buy property. But since you are married, I guess you have no worries.

Property values went through the roof over the last five years and I don't think anyone thinks they can go up much more in the short run even if LMB lowers the tax penalties on owning expensive property (over 300 million) or multiple-properties.

Renting out properties may not be a bad way to go but my feeling is at least in the Seoul area rent prices are much more affordable than buying. For example, the average 300 million won apartment in Seoul, (few are farther between these days) cheon-saes (key money) at about 150 million won. If you got a 10% return on that 150 million, you would get 15 million won return on your 300 million or 5%. Now, if you can get a 10% return on your deposit, you are just better off investing the whole money in the market.

If you try to go wol-sae (monthly payments) you are still unlikely to get much more than a mil or 1.25 mil a month so you are still looking at a 15 mil a year return on your 300 mil investment.

The only reason I see investing in an apartment in Korea is if you plan to live here for some time. Just make sure you buy in a neighborhood you don't mind spending many years in.

My advice is if you want to invest in property, do it some place else. I think the days of making money off of Korean real estate has past.

[OneWayTraffic]

[baedaebok]

If you had a choice, would you invest in Canada or Korea? Which city in Korea might yield better returns? Or, would most properties yield around 5% on investment?

Are you saying the future capital gains are over-inflated? Is this a sign of a bubble in the real estate market that may burst soon?

[Cheonmunka]

This is the toughest question.

I think the biggest indicator is interest rates. I've been looking at banners over the banks over the last few years and see the deposit rates going up from about 5 to 7 %. It is likely the same for loan rates. Inflation is occuring, and it will get a little worse this year as commodities rise.
Rather than inflating your property value people tend to tighten their belts during high interest rate periods and look ever closer at their borrowing positions.

There are some things that are good for you with Korea.
You can use the chonsei money to help fund the principle of the house cost so less needing to loan from the bank, ie, you use the chonsei money as if your own. Only thing is is when a tenant moves out there might be a few days between paying them off and getting the new money from the new tenant. Sometimes the tradeover occurs at pretty much the same time. When it looks clear that you can afford the mid-point or have it arranged beforehand, or envisage that it won't effect you, chonsei can be a good thing as it gives you instant cash/equity, something that you can not do as easily in Canada.

I think some locations still have a bit of room for capital gain. Especially places earmarked for redevelopment. But, saying that, I'd hate to be in interest gaol if a recession begins or the market wanes and you are still waiting for the bulldozers to come.
Even when they do come you have to find somewhere else to live for a year or two, at additonal expense - but you can sell your 'premium.'

I don't know about prop. tax or inflation or rates in Canada. How do they measure up? - quality of properties are certainly good. The purchase price of a place in Nova Scotia as shown to me lately was excellent. Even if it is far off the beaten track. Still better quality than here and better and cheaper than NZ.

I bought a little place in NZ a few years ago. That brought a little improvement in investment, but, I wish I had spent it in Korea, knowing now how chonsei really works. I would have made 50 million clear profit in the first 18 months when a property was available as a mortgagee sale. Alas, I thought I didn't have the cash. Now, it's too highly priced I reckon, well, maybe not. But I'm not going to get into it at this time. Not for that price as I had already basically lost it previously. I'd be directly paying for my own folly - it just doesn't sit right. There are some cheaper properties I have eyes for. But not big bug-eager eyes.

It seems like rates are going up and commodities are pushing inflation. In my little world it makes me cautious. But, I would bet there are some whose worlds are bigger or different and know where to put their investments to catch the next big thing.

PS: Do they really plan to scrap the capital gain tax?

PPS: I'd rather be looking for ways to invest in some of these commodities.