An increasing number of South Korean investors are getting interested in real estate in foreign countries, especially the United States and Japan where regulations are relatively lax and property values are stable.
KEB Hana Bank held a seminar on the global real estate investment strategy at its head office in Seoul on May 23 and nearly 100 customers attended it. Hana Bank’s private banker (PB) business division held the seminar for affluent customers to explain the procedure for taking out loans and remitting money to make an investment in real estate in major cities around the world, including New York, Los Angeles in the United States and Tokyo in Japan.
Most notably, the participants showed a keen interest in directly investing in the properties introduced during the seminar. Yang Yong-hwa, head consultant on property investment at KEB Hana Bank, said, “Real estate in the advanced market, such as the United States and Japan, has been recognized as a risk-free asset and many customers showed much interest in it because of relatively lax regulations on lending.”
Other banks’ PB divisions also held briefing sessions on real estate abroad to meet customer needs. Hana Bank established a partnership with global real estate service providers, including KF Korea and Global PMC, in March and has been seeking to launch the real estate consulting business. KB Kookmin Bank also introduced the global KB real estate consulting service in 2014, while Woori Bank is holding consultation sessions on investment in foreign properties by making use of its global network which is the largest among domestic banks. Shinhan Bank established a partnership with global real estate service firm, KF Korea, in April and will hold the first seminar on overseas real estate on May 27.
As an increasing number of commercial banks have been pushing into the overseas real estate consulting market, areas for consultation are getting increasingly diversified. Tokyo has the highest demand as it is relatively easy to access and the price of real estate there is on the rise before the 2020 Summer Olympics. However, emerging countries that have a high growth potential, such as Vietnam, recently see more investment coming in.
A bank official said “Since South Korea is strengthening regulations on household loans, the business environment for banks is getting worse. On the other hand, overseas real estate investment brokerage is emerging as a lucrative business for banks because they can provide comprehensive services, ranging from consulting to brokerage and lending through overseas branches.”