Korean Buying Spree
The Wall Street Journal (WSJ) reported on August 6 that real estate purchases by Koreans in advanced countries such as the US and the UK have soared. According to the report, Korean investors have spent approximately US$5.4 billion (6 trillion won) on purchases of properties overseas in the first half of this year, far exceeding last year's total investment (US$2 billion).
Market analysts say that emerging as one of the biggest foreign investors in global real estate markets immediately after the global financial crisis, Korea began to make heavy investments this spring.
WSJ said, "39% of Korea's foreign investments went to overseas real estate markets during the spring quarter," adding that institutional investors led a Korean investment boom in properties overseas. It also pointed out, "Their changed strategy is to invest a large amount of money in the global property market," while citing acquisition of the Washington Harbor, one of the landmarks in Washington, headed by a group of Korean investors. The Journal added, "With the world economy stabilizing, Korean institutional investors are creating a new trend of targeting foreign landmarks."
The WSJ also remarked that the surge in Koreans' overseas property investments is attributable to low returns in the domestic market compared to the global one, as well as rising tensions on the Korean Peninsula, naming increasing interest rates and an easing of tensions as factors in their return to Korean real estate markets.