Koreans find dream houses abroadKoreans are snapping up foreign real estate in a surge that has boosted the value of their overseas land and building holdings in 2006 to 34 times the value of the year before.
The government relaxed barriers to foreign property ownership last year and again this year in a bid to tame the won, whose value has soared against the U.S. dollar, threatening to put a crimp in Korea’s export engine. If that plan doesn’t work, it’s not because Koreans haven’t cooperated enthusiastically.
According to Bank of Korea data released yesterday, the total value of Korean individual and corporate property purchases in foreign countries amounted to $775.1 million last year, compared to the paltry sum of $22.7 million in new acquisitions reported in 2005. Property purchases by individual Koreans accounted for nearly 70 percent of the total last year, and the value of their purchases shot up from $9.3 million in 2005 to $514.2 million in 2006.
Nearly 40 percent of the purchases were made in the United States, accounting for about half the value of that buying. Next in line were purchases in Canada, China and Australia.
“Investments in Asian countries like Malaysia are also growing fast,” said Kim Kwang-sik, manager at the Bank of Korea’s International Department.
The drastic increase came after the Finance Ministry announced a stream of measures aimed at encouraging Koreans to spend and invest more outside Korea and take more dollars out of the country. As the won rose in value ― by 9 percent against the dollar last year ― exporters lamented they were forced to raise their dollar prices or cut profits to keep their products competitive.
The Finance Ministry allowed individuals to buy overseas property worth up to $1 million, double the earlier limit, if the property was for the owner’s personal use. That limit was abandoned last March, and further relaxations were announced last month.
By Jung Ha-won Staff Writer [firstname.lastname@example.org]