Posted June. 17, 2005 03:25,
Although Gangnam is unbeatable, the President is also unbeatable as far as this matter is concerned
- President Roh Moo-hyun
The government will never rein in housing prices in Gangnam. Tax investigation and crackdown on possession tax will not work whatsoever
- Housewives in Gangnam, Seoul
On the afternoon of June 15, an extraordinary event for investment presentation was held at the Korea World Trade Center branch of Hyundai Department Store, Samseong-dong, Gangnam-gu in Seoul. The Korea Exchange Bank and Daeshin Securities invited only high-net-worth living in the Gangnam region (Gangnam-gu, Seocho-gu and Songpa-gu) to explain smart ways to invest in real estate and shares. Those invited had a minimum 500 million won of cash and needed comprehensive asset management services using financial vehicles such as deposit, share, real estate and foreign currency. Most of the invited guests were housewives between forty and fifty years of age. About 200 potential investors attended the event.
The Governments Threats Are Not Something That They Should Be Afraid Of-
The Cheong Wa Dae, the ruling party, and the government have all been putting every energy into reining in skyrocketing housing prices in Gangnam, but housewives living in Gangnam think that the government cannot bring about the planned result. According to a survey conducted by Dong-A Ilbo, 98 respondents (82 percent) in Gangnam answered that they do not believe the government can control housing prices in their region while only 22 persons (18 percent) had faith that the government could control Gangnam housing prices. The government has raised apartment-related taxes, including possession tax, to the maximum. There appears to be no fear of the governments threat that it will undertake tax investigation until housing prices are under control.
Most of those who responded that the government could not rein in housing prices in Gangnam said that tax increases and investigations are useless policy tools. A housewife living in Daechi-dong, Gangnam, Seoul said, There is no better place than Gangnam to live in terms of transportation, education facilities, social infrastructure, and social recognition. The government has been employing unreasonable policy tools, when there are good reasons why housing prices in Gangnam keep rising. Lee Moon-sook, the president of LMS Consulting who delivered a speech on the trends of real estate market in Gangnam said, Big-sized apartments larger than 45-pyeong do not come out for sale even though their prices keep increasing. Those who want to buy apartments in Gangnam are queuing. It is the best policy for those who own an apartment in Gangnam to grasp it. All event participants agreed with her comment.
Free Funds Should Go to Real Estate-
하지만 강남 주부들이 보인 반응은 딴판이었다. 여유자금이 생기면 어디에 투자하고 싶은가라는 질문에 응답자 120명 가운데 40명(33%)이 강남지역(경기 성남시 분당 판교, 용인시 포함) 아파트를 사겠다고 대답했다. 개발 유망한 땅을 사겠다는 사람도 38명(32%)이나 됐다. 재테크에 관심 있고 자금도 있는 강남 주부 10명 중 6명이 부동산을 꼽은 셈이다.
반면 직접 주식투자를 하겠다는 대답은 23명(19.2%)이었다. 요즘 한창 인기를 끌고 있는 적립식 펀드 등을 통한 간접 주식투자를 하겠다는 사람은 7명(5.8%)밖에 안됐다.
예금 등 은행 금융상품에 돈을 넣어두겠다는 사람은 12명(10%)이었다.
Right before the lecture, the news that KOSPI exceeded 1,000 points for the first time in three months was delivered. Deputy general director of Daeshin Securities Kim Young-ik expressed an optimism about prospects for stock investments, saying, It is not such a great news that KOSPI ended at higher than 1,000 points. The KOSPI will rise to 3,000 points in a few years.
However, the housewives in Gangnam thought differently. Questioned where they will invest with their free funds, 40 persons (33 percent) out of 120 responded that they would purchase apartments in Gangnam areas (including Pangyo, Bundang Seongnam City and Yong-in City in Gyeonggi-do). A full 38 persons (32 percent) claimed that they would purchase lands with good prospects for development. This means that out of ten housewives living in Gangnam who are interested in investments and do have free funds, six see real estate as the best possible investment. On the other hand, 23 persons (19.2 percent) were interested in shares, while only 7 persons (5.8 percent) would invest free funds in indirect investment products such as installment savings funds. About 12 persons (10 percent) were interested in parking their money in bank products such as deposits.