A growing number of foreigners are buying real estate in Korea amid a prolonged market slowdown.
A total of 15,614 foreigners purchased the property and applied for ownership title transfers in 2023, representing 0.9 percent of all buyers, according to the data from the real estate registry service run by the court on April 1.
The percentage of foreign buyers has been steadily rising since 2019. It was 0.69 percent in 2019, 0.62 percent in 2020 and 2021, 0.75 percent in 2022, and nearly 1 percent last year. This means that one out of every 100 buyers in the Korean real estate market was a foreigner.
By country, Chinese nationals accounted for the majority of real estate purchases, totaling 10,157, accounting for 65 percent of all foreign buyers in the country. Americans followed them at 2,374, accounting for 15.2 percent, followed by Canada (3.5 percent) and Vietnam(2.5 percent).
The buying mainly took place in Gyeonggi Province, accounting for 42.8 percent of 15,614 total transactions involving foreigners, followed by Incheon with 14 percent and Seoul with 10.7 percent.
During the same period, there was also a notable increase in the number of leases signed by foreign landlords, reaching 17,786, the highest since the Korean court started to compile the data in 2010.
The total number of homes owned by foreigners in Korea has also been on a steady increase. According to the Ministry of Land, Infrastructure, and Transport’s statistics, 87,723 homes were owned by foreign nationals as of the end of last June, an increase of more than 3,7000 in six months and a 4.43% increase since the statistics were first compiled at the end of December 2022 (83,512 households).
Foreigners can acquire real estate for any purpose, similar to Koreans, except for land subject to permission within certain zones, such as military facility protection zones. However, they face fewer taxation burdens on multi-housing and less stringent borrowing regulations than Koreans, as they can obtain mortgage loans from banks abroad.
Last year, the government took steps to regulate foreigners’ speculative housing transactions to prevent land speculation in areas prone to speculative trading.
However, concerns have been raised regarding the adequacy of these regulations in preventing suspected illegal property transactions. The Ministry of Land, Infrastructure and Transport has identified 272 cases of suspected illegal property transactions by foreigners by looking into transactions involving foreign nations from June 2022 to May last year and official transactions from January 2018 to June last year. Among these cases, 36 cases were suspected of illegal importation of currency.
