The securitization of the real estate market in Korea : future impacts to the Korean real estate market

• Main Authors: Byun, Joon Ho, 1965-, Chao, Tommy Shih-I, 1973-
• Other Authors: Blake Eagle.
• Format: Others
• Language: English
• Published: Massachusetts Institute of Technology 2011
• Subjects: Urban Studies and Planning.
• Online Access: http://hdl.handle.net/1721.1/64906

Thesis (S.M.)--Massachusetts Institute of Technology, Dept. of Urban Studies and Planning, 1999. === Includes bibliographical references (leaves 67-68). === The real estate policy of the Korean government had until recently only focused on restraining speculative investment in the real estate market, which was the prevalent consensus in the country in the 1970's and the 1980's. These strict measures in the real estate market have been a serious obstacle to the government, in their active efforts to gain foreign capital in order to overcome the economic crisis since the International Monetary Fund $55 billion bailout to the Korean government. During the Asian crisis, both large institutional companies and small businesses went bankrupt due to financial distress caused by over-leverage. Consequently, the government has changed the paradigm of real estate policies on the basis of a free market principle, and has completely opened the real estate market to foreign investors in order to solve some of the current financial problems and to provide a momentum to redevelop the Korean economy. As part of the ongoing effort to stabilize the Korea economy, securitization in the real estate market is inevitable. In this thesis, the securitization efforts undertaken by the government will be examined to infer their future impacts on the real estate market of Korea. With the first issuance of asset backed-securities (ABS) by the Korea Asset Management Corporation (KAMCO), a resolution trust formed by the Korean government to liquidate non-performing loans, the outlook of the Korean economy is positive yet with a degree of uncertainty. In addition, the introduction of mortgage-backed securities (MBS) and real estate investment trusts (REITs) could have a profound effect on the Korean financial markets. === by Joon Ho Byun and Tommy Shih-I Chao. === S.M.