Posted March. 29, 2005 22:57,
Three out of four Koreans were found to be considering the purchase of real estate speculation instead of investments when return on invested money is around 50 percent over three year time-span.
This indicates that people apply strict criteria to real estate money management since a three-year return on investment of 50 percent is equivalent to an annual 16 percent-yield.
This is a result of a survey conducted by the Korea Chamber of Commerce and Industry (KCCI) from March 9 to 17 of 700 citizens, 20 years and older, living in the capital area and major metropolitan cities. The findings show that when asked: What is your criteria for defining speculation in terms of three-year return on investing in real estate, 32.3 percent, or 224 respondents, said 50 percent or higher and less than 60 percent.
Among those surveyed, 27.0 percent answered 30 percent or higher and less than 40 percent (an annual return of nine to 13 percent), and 11.1 percent replied, 20 percent and higher and less than 30 percent (an annual six to nine percent). Also, those who said, Less than 20 percent (less than an annual six percent) accounted for as high as 4.6 percent.
Meanwhile, a mere 12.8 percent of the respondents regarded speculation as yield over three years being twice the principle.
Recently, high-ranking government officials, including Deputy Prime Minister and Finance Minister Lee Hun-jai, National Human Rights Commission Chairman Choi Young-do, and Construction Minister Kang Dong-suk have successively resigned after being involved in real estate scandals. This is not irrelevant to peoples negative perception of real estate, the survey notes.