Crisis in S Korean building industry

Again? This happened before (in the late nineties) after the Korean tiger economy collapsed. I was working there in the mid-nineties and everyone I worked with was mad to get on the property ladder or leveraging themselves to buy investment properties off plan. The general impression of the society was that people were rude, greedy and arrogant. There was lots of talk about the uniqueness of the Korean economic miracle. A number of conglomerates (chaebols) basically owned everything (Samsung, Daewoo, Hyundai etc.).

When I was back in 2003, some of the people I had worked with had abandoned their lives and emigrated leaving all their debts behind. The rest were still tied into their massive mortgages and unable to move due to negative equity. People were a lot nicer, though, and the business environment was much more relaxed!

My guess would be that a lot of companies didn’t recover from the crash in the late nineties and struggled on with a mountain of debt using the credit markets to stay solvent. Now they can’t get this credit, their old debts are coming home to roost.

No, I don’t see any similarities at all.

Must be a case of collective short term memory loss.


Duplex wrote

The Koreans have a problem with a Household Debt of 65% of GDP. There is great fear that householders will have extra stress paying back mortgages etc.

Contrast this with Ireland’s Mortgage debt alone which is at least equal to our GDP.

I guess the private Debt in Ireland is a problem for the Banks as it appears, according to the CB Governor to be concentrated in relatively few hands. You know the old saying

“Well a train has never come along here as long as I’ve know, so of course it is safe…”