Real estate prices in Jeju continue to rise, and it has become the norm to borrow in order to purchase. Household debt is now at an all-time high… rising by almost 600 billion won… just in the first half of 2015. Joseph Kim has more.
### CG IN ###
As of July, land transactions in Jeju over the past year amounted to 42,300 lots… or 62-million square meters of land.
That’s roughly 200 lots bought and sold daily. 62 percent was bought by Jeju residents.
### CG OUT ###
The upward trend is being attributed to rising real estate prices in Jeju, mass buying by residents of other regions and foreigners, and the anxiety that if you don’t buy now, you will never be able to buy real estate.
[INTERVIEW]
Yang Geum-sun / Ido 2-dong, Jeju City
I bought some land here and some land over there for office space. Prices have gone up so much.
양금선 / 제주시 이도2동
이쪽에도 사고 저쪽에도 사무실 부지로 샀거든요...가격이 너무 올라서
[INTERVIEW]
Jwa Sang-moo / Donam-dong, Jeju City
I heard that interest rates would go up next year. I didn’t borrow a lot of money, but...
좌상무 / 제주시 도남동
내년부터 금리가 올라간다고 해서...대출은 많이 받지 않았지만...
And this trend has caused household debts to rise.
### CG IN ###
In the first half of 2015, total household debt in Jeju was 6.8 trillion won.
That’s 590 billion won more than what was recorded at the end of 2014.
It’s an all-time high.
In the first half of 2014, total household debt amounted to 5.5 trillion won… which translates to a 22.5 percent increase year-on-year.
Korea’s average increase rate was 7.8 percent… meaning household debt rose three time faster in Jeju than in other regions nationwide.
### CG OUT ###
Reasons for the rapid rise in household debt here... include rising prices of real estate, low interest rates, little difference in interests between credit loans and mortgage loans… and an influx of people coming to live on the island.
[INTERVIEW]
Ko Hye-young / Jeju branch, Bank of Korea
It’s not just housing - prices of real estate have gone up in general. More people are buying and there’s heightened demand for mortgages and other loans. Interest rates also keep going down...
고혜영 한국은행 제주본부 조사역
주택 뿐 아니라 부동산 시장 전반적으로 매매가격이 상승하고
매매량 자체가 증가하면서 주택담보 대출과 여타 담보대출수요가 증가하는 것으로 보고 있습니다. 그리고 금리가 지속적으로 인하됨에 따라서...
[camera]
Moon Ho-seong
[reporter]
Joseph Kim
Experts warn that if real estate prices drop and interest rates start going up, it could have a crippling effect on households, as individuals would have to bear the brunt of the impact.
Joseph Kim KCTV