Korean Economy and Real Estate Market in Danger of Collapse (2020-2021)

[@KpopMom1980]

One reason it's "expensive" to have kids in Korea, is cause they all want their kids to be in private schools and all that... Being a single mom in Korea, it's actually much cheaper for us to live here cause I am not worried about all that "best school" drama, or 10 after school academies... The schooling is what gets them... Also wanting a nice place in a high rise apartment... Villages are fine and cheaper... Way to much material focus, but that's NOT just Korea

[@Reddragondiaries]

I agree but that is the culture there. Everyone wants their kids in an after school academy and activities as well. And there is definitely a lot of material focus in Korea, but I guess that's just human nature.

[@surfingpenguin2279]

I really like these videos where you sit down and discuss these things in such great detail you really have done your research on this

[@felixthecat1974]

Thanks for the informative vid. Do keep us posted on your moves to permanently settle in Korea. I'm sure there are a bunch of us who wish to do the same.

[@Reddragondiaries]

So much can change, but it is an option.

[@dnralsk2305]

So interesting acually I was born and raised in Korea, And Ive been suffering a lot for getting a house and end up living in a house of monthly rent. Because my budget is not enough to get the house. But after I listened to your opinion, I think I did great..for not buying my own house. I dream the day when the price is plunged and get my own house in a reasonable price!! Anyway thanks for the video

[@ramonchapaiii9973]

I lived in Korea for ten years (2007-2017). Interesting video, Tom.

[@3210vca]

Even if the RedDragon veers off his main themes of Judo/Travel/Teaching he is never shabby or half-baked. This is a great video. Well researched, well presented, made interesting and understandable to subscribers and followers. May he prosper in this trying and challenging (difficult) times..... It also helps that he is clear-voiced and very handsome who could give any CNN/BBC/Fox News reporter a run for their money. Did he say 48?... Incredible!

[@Reddragondiaries]

Thanks so much

[@davidlee1279]

@@Reddragondiaries I miss your judo videos so much tho... :cryingface:

[@ChristianC-gy1ym]

The American real estate market is in a bubble too in certain parts of the country. But just like the stock market, I think we all need to adopt a new perspective that the Market and the economy are detached. The stock market is bolstered by the Fed, whereas the real estate market is propped up by demand and inflation. Lenders are no longer lending frivolously. Rent is peaking. No matter how badly the economy is doing, I think Wall Street and the housing market will be relatively strong. Which is a brand new concept because we have all been taught that the Market and the economy are positively correlated. But you're right, the Korean real estate market is in a hyper bubble. It's just ridiculous... And people in Korea are so obsessed with apartments, aka condos here in America.

[@Reddragondiaries]

Yes, also in America there is a bubble. I think the hyper bubble in Korea will have a day of reckoning

[@stevenobinator2229]

American housing is still far more affordable than say Canada, UK, or Australia. You guys in the US have a market economy where things fail. I'm Canada the govt takes care of things like a parents, and have met housing explode higher, never ever had a correction like in the UK or USA.

[@peterlipman8211]

Economy is harmed but S. Korea is healthy thanks to world class response to COVID-19. I imagine the plastic surgeons are still doing well on people who want vanity surgery. Americans still buying KIA AND HYUNDAI cars.

[@iRobot527]

I think you didn't recognize one basic thing because the US dollar is the default currency and it's not Korean won.

[@ChristianC-gy1ym]

@@iRobot527 do you need help with reading and comprehension

[@moneybee]

Great walkthrough of some fascinating points. The age demographics on the working population is certainly an interesting thing to consider. I've always wanted to visit South Korea, and I'm really glad I found your channel! It looks like you're really taking charge and enjoying yourself over there! With travel being my primary passion, (and the main driver behind my financial journey) I hope to experience some of what you're doing down the road! In the mean time, it's always fun finding people that are living it now! Just subscribed!

[@Reddragondiaries]

Thanks so much. It's definitely been an uncommon life after living a more traditional one for so long. I hope you get the chance to live abroad too someday.

[@toddsellars4694]

Excellent video! And greatly appreciated. Please do another update video on the economy in South Korea after January if you can.

[@Reddragondiaries]

I probably will. I'm sure a lot will have changed by then

[@GApeech08]

I'm the same age as you and thinking about buying as well. The same things that you're concerned about, I am too. Interest rates are low in the U.S. too and experts are expecting the real estate market to crash.

[@sunghochoi2871]

Hello, new to your channel. What is your logic behind speculative real estate flip and sell will rise housing price? I think the price will naturally come to its market price unless government intervenes. Demand for speculative purposes is also a demand and this flip and sell will increase the supply in housing market since multi home owners can sell or rent some of their properties without government restrictions. I want to hear your view on this. Please let me know if i am missing something. Thank you!

[@jameschang9891]

Hi, Tom. Foreigners (non-F visas) in Korea can certainly buy properties, but they most likely won't be able to secure bank loans.

[@Reddragondiaries]

How can they buy property?

[@jameschang9891]

@@Reddragondiaries Hi, Tom. I emailed you at [e-mail]

[@jameschang9891]

Hi, Tom. Just wondering if you got my last email?

[@gabrielagaianoa1841]

Thank you so much for this video. It's extremely informative. I look forward to seeing your move to Korea ^^

[@Reddragondiaries]

Maybe...

[@thecassieprojects2614]

I'm glad you're back. I missed your videos.

[@heatheroh2535]

Wow, I really enjoy your insightful and thorough explanation. Will look forward to next one:))

[@lsneerg]

Thanks for the very informative clip! I'm a Korean living in Japan, and I hope that burst of the Korean bubble works out little more softly to the average Korean than it did to the average Japanese!!!

[@miraphycs7377]

doubt it. Korean economy is controlled by monopolistic oligarchical chaebol conglomerates with huge power, influence and authority in the country. So once economy tanks it could easily bring them giants down with it

[@SamuraiKidMusic]

you're a great speaker...I can tell you're a teacher haha

[@Reddragondiaries]

haha thanks

[@rudeawakening5792]

Thanks for your assessment of the South Korean economy and real estate prospects. The prices cannot keep rising, it's true. But the prices have been rising as you don't really need a lot of buyers for transactions to take place in the real estate market. 4-5 buyers can result in an active market for bidding. You need to get that down to about 1 or 2 for the real estate market to start falling. When a collapse approaches, the commercial real estate market will be hit first followed by the residential. In this case, the pandemic could crumble the commercial real estate market, as it is beginning to in places like London and NYC. The rental real estate market could be propped up, however, if a pool of renters remains stable. In SK's case, that pool will suffer a secular but not sudden decline due to the shrinking population. That's why the residential real estate market could remain somewhat resilient although the general direction of the market is unmistakable. It will be similar to Japan where abandoned houses crop up in Tokyo's outskirts.

[@Reddragondiaries]

There are so many variables. It will be interesting to see what happens in the coming months.

[@walperstyle]

The government has been telling people they can't go to work for a while now. Pre-covid they over-regulated the marketplace in many Canadian cities, and many American cities. People have been dependent on the failed government monetary system for too long. We need some Hayek.

[@sstcatherine]

I think it will be interesting to see your transition. From your previous vids I thought you'd not leave China anytime soon, but I'm sure you'll enjoy it there if you do go.

[@Reddragondiaries]

I won't be leaving for at least a year since I just started the school year. I don't plan on staying in China for more than another couple years max.

[@stevenobinator2229]

@@Reddragondiaries yes it's too much of a trade off to stay there. It's not living it's saving, like working on an Alaskan fishing boat

[@EnkhbatKhurts]

@@stevenobinator2229 oh come oon even rural China is not that boring like Alaska ;) at least for westerners

[@eolill]

As a person living in Korea (since 2013) who has been looking into buying a home, I can confirm that the recent government policies to restrict loans and require higher LTV rates is to combat speculative investment. =) The government keeps rolling out new policies because the speculation has been hard to curb. My partner and I are currently holding off on buying a home because we expect prices to level off or even drop in the next five years, and in that case it makes more sense to live in a jeonse apartment until that happens. (A jeonse also gives you an opportunity to live in a neighbourhood before committing to buy, strongly recommend)

[@stephaniew2073]

When I lived in Korea I watched how many new apartments were being built. It was crazy because the population is going down, why build so much. Everywhere was building.

[@vishnusahani2822]

immigration .

[@NexaTrade]

Known problems won't harm the economy to the point of recession; they never do. Unexpected problems such as Covid19 and Subprime mortgage always cause recessions. One of the reasons why SK's country credit ratings and OECD outlooks are strongest among all the asian countries. I am really worried about the US, Chinese, and Japanese economies though. They are printing money to sustain their economies. It may work for the US since nothing can replace $ at the moment but how long would that last for yen & yuan?

[@Reddragondiaries]

I believe Korea is printing money as well but it's not as publicly known. It's probably the norm in situations like the one we're all currently in.

[@bananarepublic1339]

Its coming for sure this year 2021. With the blow up in Chinese real estate market (post Evergrande) plus increasing interest rates. A lot of people are gonna suffer a great deal, unfortunately

[@skitakaujou]

It could be a bubble, but I would like to explain several reasons of rise in price in central area. Leftist government(Moon's) they focus on welfare budget. So they release money. As economy is not good, conglomerate has nowhere to invest. So liquidity-driven money in the market goes to real estate. These days some money goes to stock market. So as time goes by, the amount of total currency becomes affluent and the relatively limited goods 'real estate(land)' becomes precious and the price goes up. That's the trait of real estate and it has steadily been risen for 40 years. Even if the economy is no good cause of pendemic, liquidity economy becomes active like Stock in USA. Especially Koreans had a hard life in small land with many mountains so they have strong obsession for cultivatable land generations to generations. In terms of bubble, people say the population will be decreased but the total number of population of Korea will decrease from 2030 rapidly. It does not mean decrease for the number of households. By the time of householder who was born in 1975(baby boom 1955~1975) becomes 55 years old till which age possibly buy a house in Korea, still supports demand for the next ten years(2030). Also the supply of apt. in Seoul is insufficient till 2021~2022 by the forecast of Government. As the population shrinks, centralization intensifies. So till 2022 the price in Seoul does not going down and slightly will going down from 2023 for several years and going up again till 2030(I guess^^). But other areas like new town(ex Ilsan) or local district if there are no jobs and the city is getting old and 40 years apt. can't be reconstruction after 2030, they may become slums and see the collapse like japan did.

[@TuwanaVining]

Would it be difficult for a person not carrying an F4 visa to live there unless they were an ESL teacher?

[@Reddragondiaries]

Yes. You'd need to have a E2 visa or something to allow you to stay.

[@JuKyungJin]

Im Korean and married to British. Short fact, I don't wanna live in UK bcz I earn a lot money but I don't get much benefit but only helping poorer people. If I earn same amount in Korea, I would definitely will live in Korea cuz we don't pay a lot tax and I don't need wellfare.

[@iRobot527]

Who care you don't what

[@simplyme922]

Very interesting content!

[@JamConcerned]

Hmm I hope you have a very strong connection with your friend the real estate agent. What is going on in the United States is there are major major investment groups in all states and a lot of people in the know so when it dips it will be a fight. People are already set to take advantage. Right now they are buying up homes quickly from 0-300,000 in most states. As soon as it's on the market there is an offer, it's quickly in contract. My guess is a lot of foreigners are looking at what is happening in Korea to also own property. Is this going to be for Korean's only? Wished you were in Korea to take advantage of this since I feel people are prepared and will move very fast to acquire properties. If it's a very prime area, the wealthy in that area has their eye on it already and probably knows who can't make it and who can. So maybe in addition to the area you want maybe on the outskirts, possible up and coming area's that you are interested in. Do you know the home buying purchase inside and out, what is required of you in terms of id, do you have a bank account in Korea it quickly wire funds to purchase. Also what is the policy if your purchasing the property while your not in the country? Is the real estate agent authorized to sign for you and file the paperwork at the appropriate office? You have time so get your ducks in a row. Also do you have everything that is needed to quickly make a sale without you there and also avoid getting scammed. Sorry maybe I have been watching too many k-dramas. Some people make decisions and are out for themselves.. My suggestion is sign up and follow real estate site in the area you want plus do other research on other up and coming area, or other possibilities if your not able to get into your dream areas. Know the process of what they need to do to close on a sale, check with various people just to make sure it's correct. Also the important part is getting your name on the deed if your not there?

[@bobmorane4926]

Don't they have some limitations on the number of properties you can own if you already own a property ? I thought they also have a lottery system for new condos being built. Good luck house hunting.

[@peterlipman8211]

I watch Seoul Walker channel and people seem content and happy.

[@Neekoolos]

I love Korea! (lived here for 8 years) my wife and I will retire here for sure :D

[@pkb2891]

Wow !48 yrs old !❤ 👌 👏! You look so Handsome 😍

[@dw7312]

I love Busan!

[@johnj.8903]

very informative vid, the real estate bubble is worldwide, the cheap money/m2 dilution is worldwide... covid is worldwide... stagflation is coming next... worldwide imo cheers

[@stevenobinator2229]

Hey buddy! Ya I've been thinking the same thing about Canadian housing prices. It's hard to imagine the govt raising interest levels, which is just about the only thing that will work. Remember interest rates and housing are completely inverse. Thing is we are at the bottom of interest rates, so real estate won't go much higher from here. Everyone will be tapped out. BUT my worry is a system reset where savers lose big time, and indebted people get half their debt cut. This has happened before in history. Good luck with your investing. Check my book out "Cut the Crap Trader". You still at the same school you help secure an interview for? Talk soon and good luck

[@Reddragondiaries]

Considering how this year has been going with the disparity between the real economy and securities markets, I'd say anything is possible. Normal economic cycles, as you probably know, last 10-12 years generally. We're well past that mark and now peaking again in the midst of a global meltdown. It's just ludicrous. I'm still at the same school in China. I will probably stay at this school until it's time for me to leave China, then I'll be on to my next chapter somewhere else. Good luck with your book. Looks like you've received some great reviews already.

[@stevenobinator2229]

@@Reddragondiaries I'm working in Thailand now teaching at an international school. If you ever come down here give me an email. We can have a chat and eat!

[@Reddragondiaries]

@@stevenobinator2229 Sounds like a plan

[@andrew.bisson]

I'm still waiting for the bubble to burst in the US. I thought for sure covid would accelerate that process. Unfortunately, the Fed is determined to keep propping up those housing prices. Money printer go brrrrr. The only hope I have of ever owning a home is a massive housing collapse.

[@Reddragondiaries]

I agree the FED is the main factor in the US economy. It amazes me to watch it unfold

[@majordudette]

Andrew Bisson You can move from your city to another area, maybe in another state. Lots of affordable homes in the US. Not in some locations though.

[@erikjj235]

I think a South Korean economic collapse would be more likely coming from north Korea or China. Also China is under cutting many Korean companies with better tech at lower prices. And once chinese cars are introduced in the US in the next 5 years, hyundai group will be leveled.

[@miraphycs7377]

Hyundai Motor Group (as well as Samsung and LG) is already finished in China. They used to be one of the biggest player in Chinese auto market but now all of its marketshare in China has eroded away to Chinese domestic brand as Hyundai got stuck in a middle ground between cheaper more value domestic models and better but not that much more expensive (and sometimes the same price or cheaper)Japanese, German and American cars. Their commercial truck and bus business is especially bleeding money as Chinese truck makers eat into its marketshare in Asia. LG is also starting to lose ground to China. Seem like Samsung is the only thing they got going for them.

[@checkacola]

Honestly how’s covid in China?

[@korswe]

Has it collapsed yet?

[@chrisdonovan8795]

I have no claim to be Korean, but I would love to retire there. America is so fractured, it's an exercise in frustration dealing with people on a daily basis. There's no common ground. Good luck.

[@matmatsuzaki2619]

they never recovered since the time of IMF

[@tama5890]

Nah, they won't collapse and keep going stronger. Their company are really strong and beating japan left and right. Japan is not their competitor anymore (east asia loser), their competitor are nvidia, google and other tech companies. They won't fall , don't spitting nonsense.

[@Reddragondiaries]

That was marvelous!

[@dima6618]

first

[@peterlipman8211]

Red Dragon... You need to get married and start making babies!!!!! 😆

[@Reddragondiaries]

Oh gosh! Not sure I can handle that now

[@justlim622]

I think Korea needs more immigration

[@Lonelyeco]

That could help them, but they have an issue with pricing that will still have them unstable.

[@Reddragondiaries]

I agree with you both

[@ily.velvet]

Second

[@footballsoccerlove1748]

wrong prediction