This is Why You Shouldn’t Buy Property in Seoul – InvestAsian

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Seoul is only about 200km away from the North Korean border. Naturally, the city’s metro area would be the first target in any conflict.


Will Korea’s “Crazy Neighbor” Affect Property Prices?

Perhaps the most obvious reason to not invest in Seoul, at least looking at its real estate market from a foreign buyer’s perspective, is the geopolitical risk that comes along with neighboring North Korea.

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We aren’t about doom and gloom here at InvestAsian. Indeed, it’s entirely possible that cooler heads will prevail and there won’t be another Korean War anytime this century. Or the next.

Regardless, the possibly of war on the Korean peninsula has a historical precedent and would drastically affect the cost of property in Seoul.

It’s happened before, and Korea’s risk is worth noting in the same way we’d be amiss to not mention Tokyo’s location on a major fault line, or Taiwan’s similar geopolitical problems.

If a second Korean war does break out, real estate prices would steeply decline. There wouldn’t be any guarantee that anyone’s home or apartment building would remain structurally intact, let alone ever return to its previous value.

Future war prospects aren’t necessarily something to necessarily bet on. Nonetheless, North Korea is a wildcard, and over the long-term, the chances of conflict affecting real estate investors aren’t exactly negligible.

Don’t Buy Property in Seoul: You Have Better Options

Housing markets don’t exist in a bubble. As a global investor, you enjoy a greater variety of options. You aren’t forced to choose between locations within a single city, country, or even continent.

Sure, there are some positive aspects to purchasing real estate in Seoul. The Korean Won ranks among the world’s most stable currencies, and foreign land ownership is allowed on a freehold basis as well.

But nearby places in Asia also benefit from these same factors. Singapore and Taiwan, just to offer two examples, are also developed international tech hubs with stable currencies. Like Korea, they also both allow foreign homeownership.

With all other factors being equal, why pick the property market with looming demographic decline and a less-than-remote chance of a major war happening within your lifetime?

We believe there are plentiful investment opportunities across Asia’s real estate markets. Buying a house in Korea isn’t one of them though.

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