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Posted : 2009-07-02 16:54
Updated : 2009-07-02 16:54

Koreans Stick to Real Estate to the Last

By Yoon Ja-young
Staff Reporter

Even when cornered by the global economic crisis, Koreans regard their real estate asset as something they should keep until the last moment, a survey showed.

According to the survey of 1,503 people by Real Estate 114, an online real estate market information provider, 45.3 percent of respondents said they had to sell all or part of their assets such as stocks or real estate amid the recession.

For most of them, the first thing they gave up was bank savings, with 38.1 percent withdrawing money from deposits to make ends meet.

Then came insurance policies, with 25.7 percent choosing to give them up first. Funds followed with 19.8 percent, and 8.5 percent sold stocks first.

Real estate, however, was the last thing they chose to give up. Only 7.2 percent of those polled sold real estate first amid the recession.

``A real estate asset is relatively big, and it is not as easy as deposits or funds to convert into cash. Meanwhile, its holding cost is relatively small,'' a spokesperson at the Real Estate 114 explained.

He added that Koreans' obsession with ``owning a house'' seems to have helped maintain real estate in their portfolios.

The survey also showed that Koreans increasingly prefer smaller apartments than before.

Among those who plan to buy new apartment in the future, 19.3 percent said they prefer small ones of 99 square meters or less. The ratio of such small home lovers grew by 4.3 percentage points from 2006. The ratio of those who preferred 132 square meters or bigger, meanwhile, dropped by 4.1 percentage points to 16.6 percent.

``On top of those in their 20s who are traditional consumers of small apartments, those in their 50s or older also joined the group of small apartment consumers. The aging of society and an increasing number of retired people seem to be behind the trend,'' the spokesperson explained.

Real Estate 114 expects the trend to continue. ``The need for small homes will increase as households get smaller. The ratio of one-person households reached 20 percent in Seoul last year. Some expect half of all households to be comprised of only one or two people in 20 years.''

The survey showed that residents in and around Seoul have a positive view on the real estate market, while those in provinces were pessimistic. Over 40 percent of people in Seoul, Incheon and Gyeonggi Province said the real estate market has already hit bottom, and is on the rise. In provinces, however, less than 25 percent believed this to be true. Nearly 40 percent of those in provinces expect real estate prices to fall further.

chizpizza@koreatimes.co.kr

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