Koreans Set to Snap Up Properties in US
By Jane Han
Staff Reporter
Yoo Mi-rae is getting ready to send her 19-year-old son off to college in California this fall. Among books, school supplies and other things she's buying for him is a $550,000 condo in downtown Los Angeles.
``Why throw money away on rent?'' says the investment whiz mom, explaining that her calculations, coupled with a positive market outlook, are enough reason for her to put money into a U.S. housing market suffering one of its biggest slumps in history.
With increasing forecasts predicting that the housing market will begin to recover early next year, more Korean investors like Yoo are shifting their focus from the waning domestic market to the U.S.
Ministry of Strategy and Finance data shows that Koreans' real estate purchase abroad has been on a moderate rise since January. As of April, over 600 transactions have been made.
The figure is expected to rise on the government's latest decision to fully lift the overseas property investment cap. This means Koreans are free to buy as much real estate abroad as they want.
While Southeast Asia has been garnering attention recently, experts say the lion's share of the money will be invested in the U.S., particularly in New York, Los Angeles and Miami.
``People feel safe buying in the U.S. due to their familiarity with the region,'' says Lim Chae-kwang, an agent at a Seoul-based overseas property consultancy, Rootiz.
He, however, explained that timing is key because the market hasn't bottomed out yet.
He said a condo that used to cost $500,000 last year is now about $430,000, but it's likely that the figure could dip further.
``You never know. This is why investment is like gambling,'' he said.
The situation is a little different in New York.
Moon Young-joo, an agent at a Manhattan-based consultancy, New York Residence, says that after a brief downturn recently, Manhattan prices are quickly back on a solid rise.
He said there has been about a 40 percent hike in the number of Koreans purchasing property, with most buying into high-end condos.
Moon said about 5 percent of buyers of Soho Trump, a luxury high-rise condominium that costs $3,000 per square feet, are Koreans.
``Early summer is typically considered a slow season, but this year, it has been one of the busiest,'' he said.