subject: Seoul Real Estate Experiences Increase in Foreign Investment [print this page] Seoul Real Estate Experiences Increase in Foreign Investment
A combination of undervalued property and a stable economy has lured an increasing level of foreign investment in the real estate sector of South Korea's capital city. High quality building prices remained largely stable throughout the global economic recession, a fact which has given a sense of reassurance to overseas investors.
In comparison with other Asian cities such as Hong Kong and Tokyo, Seoul property prices are, on average, some 30% lower. The situation in both Japan and China is the reverse, with real estate slumps and growing investment risks dictating the market.
In fact, South Korea's economy emerged from the economic crisis relatively unharmed, as well as boasting the fastest recovery period recorded amongst the OECD membership. Within the 20 nations represented therein, South Korea's GDP is expected to be one of the highest risers over the next year, with the IMF predicting a 6.1% rise.
By 2015, it is thought that approximately 1.8m sq metres of new office space will be created; good news for a city whose office vacancy rate is amongst the lowest in the Asian markets due to a severe supply shortage.
Although there are concerns over the ability of the market to occupy the new office developments, the further expansion of South Korea into the fields of finance and research and development (from the traditional manufacture of various goods), will likely result in a growth in per-capita office usage.
With a large amount of uncertainty lingering, it seems that it will be a few years before investors really begin to dip their toes in the water. However, many commercial property consultants believe that Seoul will become a highly attractive marketplace in which to carry out one's business.
The recent strengthening of the South Korean won against the American dollar adds further incentive for foreign investors who may cash in on foreign exchange gains achieved through the cashing out of property assets.
