There is a growing number of Koreans investing in real estate in the U.S. and in other parts of the world after Korean government lifted its overseas investment cap.

According to Brian Shaffer of the International Real Estate Trade Organization, they are hoping that Koreans will invest about $2 billion in U.S. residential property in 2006 and $1.27 billion in 2005. Such investments were mostly limited to large Korean corporations prior to the imposition of the investment cap.

In 2007, Koreans could spend at least $4 billion on overseas homes after the lifting of the investment cap in May allowing individuals to invest $1 million in foreign soils.

The strength of the Korean won against foreign currencies is prompting many Koreans to invest worldwide, analysts said. One U.S. dollar is equivalent to 930 Korean won. Government officials have encouraged Koreans to make investments abroad to aid in freeing up the currency.

A major part of their investments is geared towards U.S. cities with large Korean populations such as San Francisco, New York and Atlanta. Koreans are taking advantage of lower home prices due to the slump in U.S. housing market.
Los Angeles is more likely the benefactor of the bigger share of the money to be invested in the U.S. because it has one of the world’s largest Korean population outside Asia.

Koreatown in Southern California will reap the influx of investments based on the study of home-buying patterns of migrant groups. “It could very well release a tidal wave of investment into Southern California, particularly Koreatown,” said Peter Morrison, a demographer for Rand Corp.

In view of language barriers, most Koreans prefer to move to Koreantown where they can live conveniently without speaking English. The place already has hundreds of Korean-owned businesses. They can go to markets or shops and mingle with their own people. Southern California offers them quite a number of banks and brokers aid in their purchases.

In 2009, investment caps will be totally dropped if it gets the nod of President Roh Moo-hyun. This means more potential buyers for the 1,500 condo units now on sale or planned for Koreatown.

Bankers believe that other Koreans are just waiting for more favorable outcome from their fellow countrymen who have already invested. Once they see an investment payoff, LA real estate could expect a more upbeat Korean trade soon.


Ma. Roma C. Agsalud

Sarasota Real Estate