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Workers 'forced to buy' unsold homes

Tuesday, May 28, 2013 - 02:02

May 28 - South Korean construction workers say employers are forcing them to to buy unsold apartments to keep firms in business. Paul Chapman reports.

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South Korean construction worker Kim Keon-Hoon never wanted to buy this apartment. His employer told him he had to take the unsold property to help keep the firm afloat. He paid more than 716, 000 dollars. (SOUNDBITE)(Korean) KOM KEON-HOON, BYUCKSAN ENGINEERING AND CONSTRUCTION EMPLOYEE, SAYING: "I never wanted to come and live in this apartment. I can't afford to pay this amount of interest consistently on my salary." Kim says he was threatened with a poor appraisal if he refused to buy and it seems he's not alone. The Korean Federation of Construction Industry Trade Unions says at least five firms in receivership had done the same. South Korea's building boom has turned to dust. Sky City on Youngjong Island is accessible only by a toll bridge. Half the homes there are still empty. Residents aren't happy. (SOUNDBITE)(Korean) LEE SUNG-TAE, RESIDENT OF SKY CITY, SAYING: "We don't trust any new development towns. I hope our neighbourhood will be the last development project of our country's urban policies. Don't play games with low-income households." Apartment prices in South Korea plunged nearly 15 per cent between July 2008 and the end of 2012. Some property specialists fear more building firms could be in trouble. (SOUNDBITE:(Korean) PARK WON-GAP, PROPERTY SPECIALIST AT KOOKMIN BANK, SAYING: "There is a structural problem and another liquidity crisis could happen at any time to construction companies unless the real estate market recovers." Alongside the housing slump, personal debts have doubled in a decade to more than 983 billion dollars. That's adding to the pain in what was once one of Asia's tiger economies.

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Workers 'forced to buy' unsold homes

Tuesday, May 28, 2013 - 02:02