The real estate market appears to be cooling off a bit: sales were down in 2015. That’s bad news for investors, and experts say the government might be facing problems with public housing, as well. Mike Laidman reports.


This is the condominium purchase record of a resident in Nohyeong-dong, Jeju City, covering the last 12 months.

He bought a condominium for 210 million won in May 2015, and purchased eight units totaling 1.6 billion won through to last month.


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'Condo investments becoming riskier’

It is a typical example of an investment that is intended to make huge profits when an investor sells back his or her properties.

However, experts warn that such investments could cause future losses because the local real estate market has started to cool.


Condominium prices in Nohyeong-dong, Jeju City had grown at a gradual pace for years before spiking by an average of about 150 million won per unit last year.

Meanwhile, the number of transactions for local condominiums dropped to 3,200 last year after topping 5,000 in 2014.


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Discussion on housing market (July 18)

Experts say property speculators are pulling their money out of real estate alongside a crackdown on speculating and stricter loan regulations.

The local real estate market is expected to continue to slow.

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Jeong Su-yeon / Professor, Jeju National University
Condo prices started to drop during the first half of this year. When the real estate market booms, prices skyrocket and then remain steady. Even if demand drops, homeowners are reluctant to sell at lower prices, so it takes longer for prices to go down. I think the local real estate market has peaked.

"2016년 상반기부터 가격은 꺾이기 시작하고 있습니다. 언론에서 호가가 오른다고 얘기하시는데 대부분 시장은 올라갈때 굉장히 빠르게 올라가요. 그 다음 버팁니다. 수요가 낮아져도 주택을 소유한 사람들은 버텨요. 내려가는 데는 오래 걸립니다. 제가 볼때 지금 시장이 그런 상황입니다. "

Experts also say that the province's projects to provide public rental units need to focus more on the needs of tenants.

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'Govt. must consider accessibility, education for public housing’

Accessibility and the educational environment are two things that should be considered and improved, rather than simply building more rental units in rural areas.

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Jeong Su-yeon / Professor, Jeju National University
Families move for a better environment for their children and shorter commutes, not just for a good house. The province is building condos that don't meet these requirements, so no one wants to live in them.

"물리적으로 좋은 아파트를 얻기 위해서 가는 것이 아니에요. 아이를 키울 수 있는 환경, 나의 일자리와 가까운 거리를 원하거든요. 그런데 그런 것들이 갖춰지지 않은 단지를
만들어주면 어떻게 될까요? 아무도 안가죠."

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Gang Gyeong-sik / Provincial council member
Building more houses can’t solve the problem. Location, transportation, and other factors must be considered, especially for low-income families.

"공공주택 다 지어도 짓기만 하면 다냐. 여러가지 입지나 특히 임대주택은 저소득층이 많이 가기 때문에 교통 등 여러가지를 고려해야 되고.."

Governor Won Heeryong announced that tenant convenience will be a priority going forward when the province builds new housing sites and rental condominiums.

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Won Heeryong / Governor
The island will consider the socio-economic value of the houses that the government provides for future generations.

"오늘 제기된 문제를 비롯해서 공급되는 주택에 어떤 사회적 경제적 의미, 미래에 대한 우리의 배려와 꿈들이 어떻게 담겨있는가를 최대한 충실하게 담아나가면서.."

[Camera] Kim Yong-min
[Reporter] Mike Laidman

Experts advise that the island should increase the number of large condominium complexes - those that have at least 500 units - instead of single condominium buildings or rental houses in order to help stabilize real estate prices.

Mike Laidman, KCTV