Introduction
For this week on Inside Out Busan, I thought I’d talk about something that’s quite significant in this country, which is where you live, and I’ll also talk about some of my Korean property experiences.
The differences between Korea and England
The types of properties are generally different in England to those you find in Korea. In England we tend to live in houses rather than apartments – that’s the first major difference. The second is that English cities tend to have a ‘city centre’, and then we have vast areas of suburbs, which we sometimes call ‘suburbia’, where there really aren’t a lot of shops and it’s just street after street of residential housing. Of course in Korea, most people live in cities, and many people in the cities live in apartment blocks rather than houses.
Generally English people prefer living in houses to apartment blocks, and I think there’s a bit of history to this. During the Second World War some of the houses in the English cities had been destroyed by bombing, and even those that hadn’t were very old, and there were many so-called slums. So after the war people really wanted social changes, they voted out the right-wing Winston Churchill and elected the first left-wing Labour Party government. The new government wanted to build new homes for poor people, so they planned large numbers of apartment buildings called tower blocks, but they were a disaster. The building quality was really bad, so before long even poor people didn’t want to live there. They ended up being called ‘high-rise slums’, there was a lot of crime in them, and about 25 years later they pulled most of them down and built houses again instead. The other thing is, I think English people really like having their own gardens, and that’s not really possible in an apartment.
About 15 years ago after people’s memories had faded a little, a city living trend began, where middle-class people bought expensive apartments in city centres – and these apartments were nice – but they were generally aimed at young professionals, so you couldn’t easily live there if you had children because the apartments were too small. It’s quite different from Korea.
Korean apartment living
Now I’m in Korea, I live in an apartment. At first I lived in a small ‘one-room’ with my wife, which was directly above a mart. I used to be woken up early in the morning by them opening the store shutters, and generally from the noise in the street – beeping horns and salt-sellers yelling through the loudspeakers on their vans at 5.30am in the morning. The apartment would flash yellow on and off at night because we had one of those traffic lights outside. My wife said that the place was really basic, but I really loved it – I felt it was a very Korean experience.
Actually the reason why we lived there is because of a big difference between England and Korea – the 전세 [jeonse] system; we didn’t a large amount of cash for a deposit so we paid a monthly rent.
I didn’t know about the 전세 system before I came to Korea, and I just could not understand it at first. Or rather, I understood the principle of it, but it didn’t make any logical sense to me at all. It seemed immediately obvious that this could only work in a rising property or investment market, so I thought it sounded like a disaster waiting to happen. And the idea of sometimes giving almost the whole value of a property – maybe $200,000 – to someone and hoping you’ll get it back at the end of the contract... well I couldn’t understand that either. I mean, why not just buy a place with the same money? Really, I found the whole thing completely mind-blowing. I still think it’s madness. That’s why we had the one-room place – it was 월세 [weolse – monthly rent based].
Property ladders and bubbles
If I get my own place again, I’d like to buy it; prices just seem to keep rising all the time, so I feel that paying 전세 means that by the time I get the deposit back, the type of place I will be able to buy with the money will be even more basic. So I feel I have to be on the property ladder – as we call it in English. If you’re not on the property ladder, you’re just going to get left behind. But I still feel it’s all going to end badly with these rising property prices.
One of the reasons I can’t understand it is that I keep reading in the news that property prices in Korea are constantly going up [recently, this began to reverse], but the low birth rate means that the population in Korea will peak in 2025 – 14 years from now – and then start to decline rapidly. I read that Busan’s population is already falling, and yet everywhere I look there seem to be new apartment blocks being built here, even though there already seem to be plenty. Like in the U.S., we had a massive property bubble in England during the last ten years – the value of my house doubled in the six years before I sold it – but a lot of people who bought when prices are high, are now stuck where they are. They can’t sell because their mortgages are much higher than the value of their houses, and they would end up owing lots of money to the bank. So I’m very worried that I’ll buy a place in Korea and then watch it plunge in value, and be stuck in it.
But I still want to buy my own place. The problem with the ‘property ladder’ is how long do you wait because you think prices will fall, and how far do they rise in the meantime? My mother-in-law bought an apartment last year and apparently it’s increased by 10% in value since then, even though the place is a bit of a disaster.
Building quality
My mother-in-law’s apartment block was only built in 2003, but shortly after we moved in there was an announcement on the apartment speaker. It said that all the apartment owners participating in the lawsuit against the construction company should prepare their paperwork by the end of the week. So it turned out that the building had lots of problems and they were suing the construction company. I have to admit, the outside of the building looked terrible; all the paint and plaster was coming off so it looked like something out of Beirut in the 1980s – bomb damaged. There were lots of other problems inside as well.
They won the lawsuit, so workers have been fixing the problems this summer, although most of that seemed to involve painting the outside of the building, and I’m not sure how long that’s going to last. I have to admit, I’m a bit dubious about construction standards here, especially after the fire at the Golden Suites apartments in Haeundae last year. In my mother-in-law’s previous apartment, a large part of the plastering over the entrance came away, and guess what was underneath it? Well it looked like foam packaging material - it was just getting blown away by the wind. So I really wonder – if I finally get my own place [there was a song link here but the station didn’t have it] – what problems will it have? Anyway, despite that we might be buying somewhere this year.
Centum City
So the question is whether to stay in the same area or move somewhere else. As much as I enjoy my view of the mountains on the western edge of Busan, I keep hearing that Centum City is the new multicultural heart of Busan [or so Busan e-FM’s new slogan kept repeating after they moved there], so maybe I’ll give up living where I am and finally make the move to the Haeundae area... while I can still afford it.
Links
Busan e-FM
Inside Out Busan
Air date: 2011-01-05 @ ~19:30
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