From Gangnam to Itaewon, Seoul woos wealthy homebuyers but prices locals out of the market

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From Gangnam to Itaewon, Seoul woos wealthy homebuyers but prices locals out of the market place

Residential property prices in Seoul take surged more than fifty per cent since 2017, with the average property in Seoul now 14 times Koreans' boilerplate annual household income, leaving even dual-income families priced out of the market.

The view from the top of the International Finance Center on Seoul's glitzy Yeouido isle is stunning, as city officials rightly bespeak out, taking in the broad, winding Han river and the Bukhan Mountain on the city's northern border.

The S Korean uppercase is marketing itself as an alternative to Asia'due south traditional financial hubs. Local government are hoping that its plush offices – such as those at the IFC – and an incentive package for relocating companies that helps with rent, wages and interpreter costs volition help sweeten the deal.

And then far, three foreign companies have taken up the relocation packages and are setting upwards new offices in the IFC, co-ordinate to the local authorization. The question is: Will strange workers be prepared to plough their backs on Hong Kong, Singapore or Shanghai and movement hither?

READ> Singapore's property market is drawing expats from Hong Kong

Andrew Gilholm, an analyst with consultancy Control Risks, has been a Seoul resident for most six years. "Information technology is the nigh underrated place in Asia," he said.

"It's a chip intangible, but information technology's got more of its own identity than some of the other cities I accept lived in," said Gilholm, who has also been a resident in Singapore, Shanghai and London.

Seoul has tried to position itself every bit a regional financial centre before, simply success has been express. Im Guk-hyun, the fiscal industry team leader in the Seoul government, thinks the city's competitiveness has been boosted recently by the imposition of the national-security police in Hong Kong and Republic of korea's treatment of the coronavirus pandemic – equally of this calendar week, the country has recorded 526 deaths.

Seoul has tried to position itself as a regional financial centre before, just success has been limited. (Photo: Unsplash/Jeonguk)

Optimism that Seoul could one day be the region's leading fiscal heart has been buoyed by the surprise decision taken by The New York Times to move part of its digital operations there from Hong Kong, due to fears over Hong Kong press freedoms. At the same time, South Korea is enjoying growing global recognition of its cultural exports such as the M-pop band BTS and the breakthrough film Parasite.

Simply compared with Hong Kong and Singapore, South korea is still hamstrung by tough regulations, an inflexible labour market place and higher taxation rates, said Park Chong-hoon, head of research at Standard Chartered in Seoul.

James Kim, chair of the American Sleeping accommodation of Commerce in Korea, is more than upbeat. "In that location is e'er a misnomer, that Korea is a hard place to alive, a difficult identify to work," he said. "I tin can tell yous from dealing with all the CEOs [of US companies], they all desire to stay in Korea."

"I can tell you from dealing with all the CEOs [of US companies], they all want to stay in Korea." – James Kim

'WE CANNOT AFFORD TO Purchase AN Flat Here'

For many ordinary Seoulites, nevertheless, the city's plans to woo more wealthy foreign executives will thing little as a years-long residential property bubble is exacerbated by record-low interest rates.

JH Kim, 41, an office worker who is married with two children, said the toll tag for the flat he rents in Jamsil has doubled since he moved into the area in the due east of the city 6 years ago. The boilerplate price in the affluent suburb has increased by more than 100 per cent to 1.58 billion S Korean Won (S$1.9 1000000) over the past five years, according to Real Estate 114, a local property consultancy.

"Although we are a dual-income family, we cannot beget to purchase an apartment here," Kim said. "Information technology has go out of accomplish."

Compared with Hong Kong and Singapore, Republic of korea is still hamstrung by tough regulations, an inflexible labour marketplace and college tax rates, said Park Chong-hoon, head of research at Standard Chartered in Seoul. (Photo: Unsplash/Markus Winkler)

Stabilising the red-hot property market of the greater Seoul area – in which about half the country'due south population lives – has become one of the biggest policy challenges facing South Korean president Moon Jae-in.

When he took office in 2017, Moon promised to address the housing problem in one of his primal social welfare policies, but since then prices in Seoul have surged more than 50 per cent – the fastest stride in the world, according to statistics site Numbeo. The average property in Seoul is now 14 times Koreans' average annual household income, according to KB Bank data; iii years ago, it was 11 times that.

While the affluent Gangnam, which translates to "south of the river", has been immortalised by the electronic music parody Gangnam Style, scores of other areas are popular with foreigners, from Seongbuk-dong, the hillside diplomatic enclave overlooking the city, to the trendy, upward-and-coming Yeonnam commune or Seorae Hamlet, the urban center'due south French quarter, which is popular with young families.

As with other due north-due east Asian cities, Seoul swings through stark seasonal changes from sub-zero winters to steaming summers, to which expats need to acclimatise. Throughout the year, hiking trails and riverside cycling are natural choices for a trip out of the concrete jungle, always to be concluded with a sumptuous Korean barbecue, cold draught beer and a nip or two of soju.

Gilholm said at that place are difficulties living in Seoul – tedious battles with bureaucracy among them – only adds that neighbouring Democratic people's republic of korea'due south armed services provocations rarely business organization him.

"Taxation and cost of living are toward the summit of my list; Kim Jong Un obliterating me is not 1 of the considerations."

Stabilising the red-hot property market of the greater Seoul area – in which about half the country's population lives – has get one of the biggest policy challenges facing Southward Korean president Moon Jae-in. (Photograph: Unsplash/Robson Hatsukami)

Buying GUIDE

Renters be prepared: Some South Korean landlords favour Jeonse – or key deposit – over charging a higher monthly rent. The unique organization, which is slowly fading from popularity, means fronting a hefty deposit that the landlord is free to invest and later return at the cease of the charter.
Agents charge fees of betwixt 0.4 and 0.9 per cent, depending on the price.

WHAT YOU Can Purchase FOR…

US$1.5 million (S$2 million) A three-bedroom apartment in bustling Itaewon, known for its nightlife.
U.s.$2.1 million A 3-bedroom apartment in glitzy Gangnam, the city'due south modern commune south of the Han River, full of high-end apartments, luxury fashion houses and plastic-surgery clinics.
U.s.$4.2 million A three-sleeping accommodation luxury apartment in Hannam, with its stunning view of the Han River and Mt Nam, a popular expanse with elite concern executives and foreign diplomats.

"Although we are a dual-income family, we cannot afford to purchase an apartment here. It has go out of reach." – JH Kim

Additional reporting by Kang Buseong in Seoul and Nicolle Liu in Hong Kong

From Gangnam to Itaewon, Seoul woos wealthy homebuyers but prices locals out of the market

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