Logo of Phnom Penh Post newspaper Phnom Penh Post - Korean investors turn to real estate

Korean investors turn to real estate

Content image - Phnom Penh Post
Korean investors have been turning their attention towards the real estate market, recent data has shown. yonhap news agency/the korea herald

Korean investors turn to real estate

Korean investors have been turning their attention towards the real estate market, reflected in an increase in mortgage lending, while cash flows in the equity market have been overall stagnant, recent data showed.

According to data released by the Bank of Korea (BOK) last month, the outstanding balance of mortgage loans held by banks and other financial institutions in Korea came to a combined 830.3 trillion won ($700.5 billion) as of September.

The latest data is a noteworthy jump from the corresponding figures of 808 trillion won in 2018 and 770 trillion won in 2017, respectively.

On top of that, the total volume of mortgages extended by financial institutions gained 9.5 trillion won in the third quarter compared to 4.3 trillion won in the first quarter of this year, separate data from the central bank showed.

The BOK cited a rise in the purchase of apartments and borrowers’ need for capital to pay for jeonse – a home lease system unique to South Korea that requires tenants to pay a large sum of money as a deposit instead of monthly fees – behind the rise in numbers.

Both the combined assets held by institutions and the increase in mortgage lending are seen as important barometers for local investors’ interest in the real estate market.

Meanwhile, combined deposits in brokerage accounts – including dormant ones where investors have yet to claim profits from investments – in Korea came to 24.8 trillion won as of last week, a Korea Financial Investment Association data showed.

The figure has remained overall flat for nearly a year, indicating a lack of fresh investments amid a sluggish stock market, weighed on by risks stemming from global issues including the US-China trade war.

The outstanding balance of margin loans extended to investors for purchase of stocks traded on the benchmark Kospi and the secondary Kosdaq came to 9.3 trillion won as of Thursday.

Though the figure hovered above the 10 trillion-won mark from February to early July, it fell below the line in late July. It has remained below the mark since.

“There’s a belief among South Korean investors that there’s a safety net on real estate prices – that it won’t drop below a certain level,” said Hwang Se-woon, a senior researcher at Korea Capital Market Institute.

“Due to the belief, coupled with the sluggish stock market, the nation’s investment has been flowing into the real estate market,” he added.

The data comes as the Korean government has adopted a slew of measures to tame soaring apartment prices, including tighter lending rules and higher property taxes for expensive homes.

THE KOREA HERALD/ANN

MOST VIEWED

  • Hun Sen asks Cambodians to believe in government

    Prime Minister Hun Sen on Monday asked citizens and investors to trust that the government will overcome the challenges brought about by Covid-19 and the loss of the EU’s Everything But Arms (EBA) scheme. Speaking to reporters at the Peace Palace in Phnom Penh,

  • Tragedy as four lions devour teenager in Pakistan safari park

    In a horrifying incident at an animal park in the Pakistani city of Lahore, four lions killed a 17-year-old grass reaper. However, how Muhammad Bilal Hussain managed to get near the lions was yet to be ascertained. Safari officials said Hussain climbed a 3.7m high

  • Westerdam passenger ‘never had’ Covid-19

    The US Centres for Disease Control and Prevention (CDC) said the US citizen that allegedly tested positive in Malaysia after travelling on the Westerdam was never infected with Covid-19 in the first place. In an article published in the newspaper USA Today on Friday, CDC

  • ‘Ghost staff’ found, $1.7M returned to state coffers

    The Ministry of Civil Service said more than seven billion riel ($1.7 million) in salaries for civil servants was returned to the state last year after it discovered that the books had been cooked to pay ‘ghost officials’. This is despite claims by the Ministry of

  • Woman wanted for killing own son

    Police in Phnom Penh’s Meanchey district are on the lookout for a woman who allegedly hacked her son to death on Sunday in Stung Meanchey III commune. District police chief Meng Vimeandara identified the son as Chan Sokhom, 32. “The offender can’t escape forever.

  • Gloom hits Siem Reap tourism

    As the Kingdom’s overall tourism sector continued to grow last year, industry insiders in Siem Reap have expressed their deep concerns, citing a sharp drop in Chinese arrivals to the province beginning late last month. Cambodia earned $4.91 billion in international tourism revenue last year,