The South Korean government gave a big, sloppy smooch to US-based real estate developers targeting the Korean community: in May, it loosened restrictions allowing its citizens to invest in foreign real estate. The cap is now at $1 million, double the $500,000 they were previously allowed. While the reasons have little to do with LA's real estate boom, you can thank that weakening dollar for South Korea's new laws. In just a few months, the US dollar has dropped %5 against Korea's currency, the won. Korea's government hopes the lift in restrictions will encourage its citizens to take more of their money out of Korea to reverse potential economic threats posed by the sad, pathetic dollar.
So what does this all mean for LA's real estate market? Actually, not much. According the Investor's Business Daily, Korea's plan isn't exactly gangbusters:
Still, inquiries from Korean investors have been flat since Korea announced its policy change, says Wilshire Bancorp (WIBC) senior vice president Gene Sheen. Yet the developers for projects like The Mercury, are reporting they had to turn away some of the 1,800 visitors to their open house and have already sold 14 units over $800,000. However, many of those units were more likely sold to Korean-American buyers than to foreign investors. To boost Korean interest in these properties, bankers, lawyers and real estate developers plan to increase visits to Korea soon to drum up more investment monies from buyers there.
South Koreans Eye U.S. Property [IBD]