Press Coverage on the Korean Real-estate market – October 13th-14th

Mixed opinions on Korean Bubble’s threat

 

‘The Coming Korean Bubble’

On October 13th,  Jasper Kim, an associate professor of law and finance at the Graduate School of  International Studies of Ewha Women’s University in Seoul, asserted the risk in Korean real-estate market.  She said the current situation can be compared with U.S. subprime giving 3 points: 1)continuing consumer confidence that real-estate prices will go up, 2) benefit from cheap credit and 3)traditional preferences on real-estate investment.  She worried the potential risk which still remains in Korean housing market despite the increase in  LTV ratio and DTI restriction level.

‘South Korea Doesn’t Have a Housing Bubble’

Following day, Dominique Dwor-Frecaut, a Senior Economist of the Royal Bank of Scotland, claimed against Professor.Kim’s opinion. He clarified real-estate valuation is not as bad as Professor.Kim said, according to Kookmin Bank real-estate price index, BIS report and IMF Study. He said what’s more serious is the increase in household debts, which have increased to 139% of disposable income at mid-2009.                         See more from WSJ.com