Five years after the global financial crisis, the South Korean construction workers feeling pinched more than ever because they are shouldering a mountain of debt from a real estate slump, has cast a long shadow on the country's growth prospects.
The specter of bankruptcy, some construction companies and their staff persuaded to take loans against unsold apartments.
"There is pressure, said:" These practices have a parallel world, there is nowhere a construction worker, who requested anonymity because of the sensitivity of the matter.
"In Korea and run like the military, especially in the construction and level of loyalty to the company remains strong," he said, his employer Poonglim Industrial Co., had asked him to buy two apartments, which meant he had to borrow 8,000,000 won ($ 712,800).
In April, the court completed its takeover Poonglim, public relations officer would only say, on behalf of companies and employees to take loans to pay interest payments Poonglim. "We are discussing all of these apartments debt creditors resale discounts to resolve the matter," he said.
Such loans are in Asia's fourth largest economy a big problem, just a small portion of outstanding household debt has climbed to nearly $ 1 trillion.
South Korean household debt has doubled over a decade of debt-to-income ratio exceeding those in the U.S. in 2008 before the collapse of the subprime level.
Debt and long-term real estate market downturn, hit in January-March quarter, private consumption fell for the first time in Korea five closely keeping their wallets.
Other data also show that the economy was once known as the "miracle of the Han River," because from poverty to prosperity rise statehood in just one generation could be dried.
In 2012, gross domestic product (GDP) grew by 2% this year, South Korea's central bank forecast a 2.6% expansion.
President Park Geun-hye, who took office in February, has implemented a family debt relief plan. However, plans to invest 80 billion won, is far below the 180,000 won, she was in her campaign promises.
Original proposal park is called "Gross National Happiness Fund" to provide debt relief for the 320 million people, but you will see only a small amount of 324,000 eligible.
Park, Park Chung-hee's authoritarian ruler who is responsible for South Korea's star in the 1960s and 1970s, industrialization, the daughter of her campaign promises, "the era of people's happiness."
Property experts in Korea National Bank, Park Royal gap, a sick body is "morphine" measures, and will not solve the fundamental problem, weak domestic economy.
South Korean construction industry, about 6% of the economy and employs more than one million people.
Forced to buy
An office worker Byucksan of Engineering Construction Co., Hoon Kim McKeown said he purchased in 2008 unsold 8,000,000 won in Seoul outside two bathrooms, four-bedroom apartment in the outskirts of the mountain teetered on the edge of his Employers also push bankruptcy.
Secured loans are usually taken by the workers providing liquidity cash-strapped companies, usually paid by the company's interest.
Buy father of two children bear the debt of 5,000,000 won and 3,000,000 won, he was unable to repay the monthly interest payments. Kim and other employees said they were forced to buy, and has taken the company to court.
Gold has been postponed, his company purchased the unsold apartments, this is the second time, the first time in 1998, the Asian financial crisis, the International Monetary Fund (IMF) in the Korean crisis is still called.
"International Monetary Fund (IMF) during the crisis, many enterprises to raise funds to allow their employees to buy an apartment ... So when the company asked that we do it again, it's not the kind of atmosphere that anyone might object," Kim told Reuters agency in the dusty shell a high-rise apartment blocks in Seoul edge. His mortgage, afraid his career will be affected.
When asked about the workers claimed they were forced to buy unsold properties, Byucksan officials said the company and its sympathy for the plight of the staff. "This is a past practice, it is now only rely on reselling them solve there anything we can do, as a corporate governance issue is still under receivership."
South Korean construction company Trade Union Confederation, an umbrella union group, estimated in February this year, members placed over five companies a total of 1,047 have been told unsold apartments, from their employers to buy the total value of 45.4 billion won.
"We know, said:" Our workers are in pain and we all hope that these houses will be sold again soon so that we can get rid of this pain Byucksan, who requested anonymity because he was not authorized to speak to the media officials.
Due to oversupply and a lack of capacity, the metropolitan area apartment prices fell by 14.7% to the end of 2012, from July 2008, according to Moody's Investors Service. Crash kills builders.
"There is a structural problem, unless the real estate market recovery, another liquidity crisis could occur at any time construction company, said:" The National Bank Park.
National's own data show that house prices fell the fastest annual decline in the level of 0.76%, April 2004. Bank data is considered to be South Korea's real estate market conditions, the official targets.
General malaise
The plight of the construction industry is not confined to smaller companies.
The top nine South Korean construction companies, including Hyundai Engineering Construction Co. and Samsung C & T Corporation giants such as combined first-quarter operating loss of 480.9 one billion KRW, online financial news service FnGuide compilation display.
Of which the first 100 builders in South Korea, Ssangyong Engineering and Construction Co., Ltd. Kumho Industrial Co., Ltd. and other 21 companies, including debt restructuring under court receivership or programs, according to the Construction Association of Korea.
Before the recovery of the construction sector, some parts of the industry is likely to put pressure on employees to buy the bank's same spirit of self-sacrifice, to see people selling their jewelry to help the government to pay back 570 one billion loans from the IMF (IMF) in the 1990s Asian financial crisis.
Byucksan and live in a smaller apartment in the same town, or a 44-year-old Kim, efforts to improve family education under the weight of huge debts, destroying their life savings.
"Loans are still outstanding, which is what hurts our workers and I have never wanted to live in this apartment."
 
 



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