From “South Korea’s High Household Debt Adds Financial Woes” WSJ Nov 29-30 ’08
South Koreans are forbidden by law to engage in high levels of borrowing for real estate…loan-to-value ratio of South Korean real estate is 47%, well below the 90% and higher ratios seen in parts of Europe and the U.S.
Apparently this doesn’t prevent heavy borrowing, which is “rooted in high housing and education costs.”
One would think that, if in fact Korean real estate is less leveraged than elsewhere, they’d be less affected by economic instability. It would be nice to know more.