• The global economic slowdown has had a major impact on the Korean economy, with Q4/2008 economic growth contracting at the fastest rate seen since the Asian Financial Crisis
• There has been a sharp fall in prices, with sales transaction volumes also dropping. The bleak economic outlook means a significant recovery in prices is unlikely to occur during 2009
• The leasing market has also been affected, with easing demand causing average vacancy rates to rise from a record low of 0.3 per cent in Q3/2008 to 1.1 per cent in Q4/2008
• Despite weaker market conditions, rents continued to increase in Q4/2008, up an average 7.6 per cent on Q4/2007 – the fastest rate of increase since 2001
• Current tight conditions in the leasing market, together with a lack of new supply, mean the average vacancy rate is unlikely to rise much higher than 5 per cent in 2009. This will help to ensure rents remain relatively stable over the year ahead.

CONTACT INFORMATION
JoAnn Hong
+822 2124 4182
jhong@savills.co.kr

Simon Smith
+852 2842 4573
ssmith@savills.com.hk