you think there's a housing bubble in the US ? check out Korea

May 19, 2006 Finance Minister Han Duck-soo has joined a growing number of local experts and government officials voicing concern that the nation's red-hot real estate market is about to cool down, saying the housing market in affluent southern Seoul is reminiscent of that in Japan just before the real estate bubble burst in the 1990s.
"The apartment price in three districts in Gangnam (Gangnam, Seocho and Songpa) is 18.9 times the average annual income of local wage earners, closely trailing a figure of 21.7 set in Gangnam [southern Seoul] in December 1990, when the nation's real estate bubble burst," said Mr. Han in a regular press briefing in Gwacheon, south of Seoul, yesterday.
Drawing the parallel with Japan's housing market in the 1980s, Mr. Han said the current situation is "beyond a normal level."
"We will take measures to prevent the housing bubble from deflating suddenly," he said, noting property prices elsewhere in Seoul appear to be stable. His comments echo those made by a number of top government officials and economists over the past few days, all expressing concern that inflated housing prices may soon take a significant tumble, with serious consequences for local mortgage lenders and homeowners. Construction Minister Chu Byung-jik said on Tuesday that the real estate markets in regional and Seoul suburban areas have already begun to cool down, warning that houses in the capital could follow suit in the second half of this year.
On the same day, Kim Seok-dong, the Deputy Finance Minister, also said the government's measures to curb home price hikes would take effect in earnest in the second half of this year.
Now another senior official at the Finance Ministry has joined the fray; Kim Yong-min, director general for tax and customs, said Korean real estate prices are at a "turning point."
"The most expensive apartments in Korea cost about 60 million won [$63,357] per pyeong [3.3 square meters], about the same as the most expensive apartments in Tokyo," Mr. Kim said in an interview with local radio station SBS radio. "Given that the average Japanese income is about three times that of the average Korean, one can certainly say that bubbles exist in the market," he said. Mr. Kim said housing demand in Gangnam would be "scattered to northern Seoul areas," once state-led reconstruction projects in the areas kick off this summer.