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Staff Reporter
South Koreans' purchasing of overseas real estate fell by more than 70 percent last month from a year earlier as individuals and businesses here continued to remain reluctant to put money into foreign properties amid the deepening U.S. housing market slump and its ripple effects in China and other parts of the world. The falling won against the dollar and the aggravating global credit crunch also made property buying abroad more difficult.
According to the Ministry of Strategy and Finance Wednesday, local residents purchased homes and other properties in foreign countries worth $25 million in September, down 73 percent from $92 million a year earlier. The number of transactions totaled 56, down from 288. The September figure was also lower than the $45 million of the previous month.
Overseas property buying in the third quarter totaled $141 million, down more than 50 percent from $312 million for the same period last year.
The ministry said the international financial market turmoil and the sluggish housing market at home and abroad continued to dampen local investor sentiment. The worsening credit shortage and the possibility of a global economic slowdown accelerated a drop in home prices around the world, discouraging Koreans from spending on homes and other properties in foreign countries.
The government began easing restrictions on property investment overseas early last year, allowing Koreans to invest up to $3 million in overseas real estate. The measure was designed to encourage a dollar outflow from the country to slow the won's appreciation against the greenback at that time. Now, there is no ceiling if the acquisition is for residential or investment purposes.
By country, the number of property purchases by Koreans rose to $11 million in the Philippines and other Southeast Asian nations last month, up from $4 million in August, according to the ministry. But transactions in the United States declined by one-third to $10 million from $31 million over the same period.
Individuals' property purchases amounted to $18 million, while those by businesses totaled $7 million. The average amount of money spent on each purchase was $450,000, down from the previous month's $500,000.
A total of $5 million was spent purchasing properties for residential purposes against $20 million used for investment.
leehs@koreatimes.co.kr
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