Property in South Korea Essay Example | Topics and Well Written Essays - 1250 words - 3

Property in South Korea - Essay Example An investment requires a medium of exchange and that is usually money. Money is a deteriorating asset in itself and loses value constantly. It is, for this reason, it is exchanged for property which is expected to retain its value. Here is the fallacy that in fact, property achieves a higher value on the fall of the value of money, or rather its purchasing power. Therefore the value of the property is increased due to the fall of the value of money. It is illogical to believe that property has obtained a higher value. But such is the force of the human mind that this has become an accepted belief. The main reason for this belief lies in another fact; that due to the constant expansion of markets the needs of the people increases. While the money supply can be expanded, the supply of physical property remains the same. This mismatch is the real reason why property prices increase due to increase in demand. Morgan Stanley has decided on an astonishing investment in the commercial property previously owned by Daewoo. It has bid a handsome amount of $ 1 billion for this office tower located near the railway station in Seoul, S. Korea. The demand for quality space located in prime business districts is increasing and existing land parcels are extremely difficult to consolidate, leading to unimagined high prices. This deal is no big surprise as Morgan Stanley has a large portfolio of property investments of even larger figures, and has the intention to acquire more properties around the world for its valued clients. The movement of economic liberalization that commenced some thirty years ago is now maturing and covering vast areas and countries, previously considered under-developed, are fast catching on to this progress. This has had multiple effects all around the world. International barriers to trade, movement, and communication are being removed or eased to facilitate free movement of capital and human resources.