Korean Residents Aboard Withdrew Over One Trillion Properties Last Year

Mr. Im (41), previously a fund manager, sold his 42-pyeong apartment and a four-story building for 2.4 billion won early in 2002 before he immigrated to Vancouver, Canada. He said, “Because the feeling of insecurity in Korea had been growing, and the prospect of real estate seemed to be passing its peak, I thought I didn’t need to leave my assets in Korea.”

It is reported that like Mr. Im, Korean residents abroad who left their assets in Korea withdrew their properties abroad 14 times more than three years ago.

According to the Bank of Korea on March 1, properties withdrawn by Korean residents aboard, like Korean residents who have foreign citizenship or residency, were valued at 954 million dollars in 2003, which was a 76.5 percent increase compared to 541 million dollars in 2002.

Properties withdrawn by Korean residents abroad in 2003 were 13.7 times 69.7 dollars in 2002. That is equivalent to one trillion 122.8 billion won at the current currency rate.

The amount of properties withdrawn by Korean residents abroad is accrued amounts of money that people emigrating carry when they leave for a foreign country after selling their real estate and bank accounts in the home country.

According to Yoon Eui-jeong, the head of the international payments department at the Bank of Korea, “Since the reporting system of properties withdrawn by Korean residents abroad was scrapped in July 2002, the property outflow to abroad has been continuously increasing.” He added, “The high prices in the real estate market last year probably encouraged Korean residents abroad to sell their houses in the home country.”

It was also revealed that some of them sold their assets out of the feeling of insecurity toward the domestic situation. “J,” president of “A” consulting firm, which specializes in managing assets of Korean residents abroad, said, “After the current administration took office in last spring, the demand for properties selling has increased.” He added, “Korean residents abroad have given a spur to selling their assets as the uncertainty in Korean economy and their social and political insecurities grow. The government’s strong measurement for controlling real estate prices last year also helped the selling mood to continue.”

sanjuck@donga.com changkim@donga.com