Property-rich celebrities saddled with huge debt

Celebrities are envied for owning expensive buildings in rich neighborhoods. Some may live in the lap of luxury but behind the gaudy exteriors a closer look at the books shows not all is necessarily well and good.

Bad luck seems to have some stars sinking in debt with sky-high mortgages due to plummeting real estate prices.

Actor Song Seung-hun, who starred in TV dramas “East of Eden” and “Autumn in My Heart,” has been reported as the celebrity owning the most expensive building here.

According to Chaebul.com, an institute monitoring conglomerate activity and high-profile businesspeople Monday, Son topped a list of 26 celebrities possessing the most expensive single building based on market prices set by the national tax service on commercial properties.

His building in Seocho was valued at 10.7 billion won. Six years ago he paid 11.4 billion won for the five-story 1,311-square-meter building.

Singer Seo Tai-ji, the famed leader of Korea’s legendary pop group Seo Tai-ji and Boys, has a nine-story building in Gangnam worth 9.27 billion won, and was runner-up on the list.

Seo also owns a property in Jongno with his father that is valued at 6.35 billion won. The value of all his real estate is 16.62 billion won for the highest total value of properties among local celebrities.

Actor couple Cha In-pyo and Shin Ae-ra were third on the list for owning an eight-floor building worth 7.3 billion won, also in Gangnam. Not far away, actor Park Joong-hoon has a building valued at 6.2 billion won and star couple Lee Jae-ryong and You Ho-jung were fifth with real estate worth 5.34 billion won.

This is the first time the market prices of celebrity-owned buildings have been revealed.

While the combined value of the buildings owned by the 26 stars totaled 116 billion won, the loans they have taken out are estimated at 96 billion won. The average debt ratio for those on the list was over 80 percent.

Though financial companies lend money based on the reputation and potential of the borrower, the debt can still be a burden for celebrities.

YG Entertainment CEO Yang Hyun-suk reportedly borrowed 10.14 billion won from a bank, near triple the market value of the company’s headquarters in Chungdam-dong, worth 3.36 billion won.

Because of plummeting property prices, some celebrities on the list have lost billions of won recently.

Movie star Jang Dong-gun bought property last June for 12.6 billion won that is now worth just 3.4 billion. Jang borrowed 4.8 billion won with the building as collateral, facing a debt ratio of 141 percent.

Another movie star, Lee Jung-jae borrowed 4.55 billion won for a building he bought for 4.75 billion won last April, but the property is now worth 1.99 billion won.

“The occupant can be kicked out of their homes without even getting their deposit back when they auction their properties if their debt ratio becomes too high,” said Park Won-gap, the head real estate researcher at KB Kookmin Bank. “Celebrities must be very cautious concerning their assets as their incomes are volatile.” <The Korea Times/Cho Mu-hyun>