Comparative Analysis of the Real Estate Market Between South Korea and Spain

다국어 초록 (Multilingual Abstract)

In the past thirty years, financial or real estate crisis has been the most common type of economic crisis. In 2008 Spain suffered a financial crisis that it never experienced before in its whole history. Recently, South Korea seems to have been forming a real estate bubble, especially concentrated on Seoul and its well-known district of Gangnam.
In case of Spanish real estate bubble, capital and big cities were the areas to experience a huge increment of housing price first, and similar price increase spread gradually to local cities and provinces.
Thus, this paper focus on the comparative analysis of Spanish and Korean real estate market and provide a fundamental analysis on the Korea real estate market based on the Spanish experience on real estate crisis.
Mainly, this paper examine through literature to review recent economic history and infer the factors which were the causes of the real estate crisis. After gathering data and understanding the history of real estate markets of both countries, this paper will proceed with comparative analysis using index such as: housing index, corruption rate and Industrial Confidence Indicator (ICI) and Business Survey Index (BSI).
The results of our analysis show that the housing prices in South Korea are expected to increase due to a strong correlation between corruption level and housing prices and a deterioration in of BSI index. We offer some suggestions to prevent a full-blown real estate crisis.

목차 (Table of Contents)

• 1. Introduction 1
• 1.1 Purpose of the Study 2
• 2. Spanish Real Estate Market 3
• 2.1 Spanish Housing Prices 3
• 2.2 What Cause the Spanish Real Estate? 6
• 2.2.1 Global Financial Crisis 6
• 2.2.2 Corruption 7
• 2.2.3 Taxes and Land Policies 10
• 2.2.4 Rental vs Ownership 11
• 2.3 Bank of Spain 12
• 2.4 Summary 14
• 3. Korean Real Estate Market 15
• 3.1 Introduction 15
• 3.2 Housing Price 16
• 3.3 New Trends in Housing Sector 17
• 3.4 Mortgages 19
• 3.5 Government: Housing Policy 21
• 3.6 Financial Institutions 25
• 3.7 Summary 27
• 4. Comparative Analysis 28
• 4.1 Comparative Housing Index 28
• 4.2 Spreading Effects 30
• 4.3 Corruption Index 33
• 4.4 Business Confidence Index 35
• 4.5 Conclusion 38
• References 40