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Real-estate bubble may be approaching, but not so violent as some predict. Tak Kee-huyng khtak@hani.co.kr
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Economists still divided over fate of Korean housing market
Half of a group of prominent South Korean economists surveyed forecast that the bubble in the local real-estate market will ease in the second half of this year. According to a survey conducted by The Hankyoreh, out of 10 economic experts, including college professors and business leaders, all admitted that a bubble exists, but five predicted the bubble would not burst. Regarding where the bubble would first begin to ease, the experts expressed divided opinions, with four citing the northern part of Seoul, with the rest pointing to the southern part of the city, Gangnam, which is currently an epicenter of property speculation.Most of the respondents said that price drops in northern Seoul would be modest, but cuts in the Gangnam district would be significant. But the experts predicted a smaller average housing price drop of 20 percent or more, compared with the figure projected by the government of 30 percent or more. Meanwhile, the experts painted a bleak outlook for the overall economy, saying that its current growth would "remain unchanged" or "worsen" in the second half of the year. Seven of those surveyed predicted the economy to grow between 5-5.3 percent, with the lowest forecast standing at 4.5 percent. A majority of the economists were in favor of the government’s move to sign a free trade agreement with the United States.
