Foreign Buyers in Seoul’s Real Estate – A Rising Backlash and Calls for Stricter Laws

 Why are Chinese buyers purchasing luxury homes in Seoul? Explore the fairness concerns and the South Korean government's proposed regulations.

As Chinese nationals increasingly purchase luxury homes in Seoul with cash, public concern is growing over perceived inequality in South Korea’s real estate regulations. Many are now calling for stronger policies based on the principle of reciprocity and stricter rules for foreign land ownership.

Rising Purchases by Chinese Nationals

Recent reports highlight a surge in real estate acquisitions by Chinese individuals, especially in areas like Gangnam and Seongbuk. In some cases, buyers in their 30s are purchasing properties worth over 10 billion KRW entirely in cash, or through foreign loans. This has triggered widespread debate on fairness and potential speculative behavior.

Sharp Increase in Property Holdings

From 54,000 in 2020 to over 97,000 in 2025, the number of properties held by Chinese nationals in South Korea has jumped by 78%. Over 68,000 are concentrated in the capital region. Their focus on premium zones is fueling concerns about market distortion and overheating.

Unbalanced Regulations

While Korean citizens face tight financial regulations like LTV and DSR limits, and tax penalties on multiple homeownership, foreign buyers often bypass these restrictions through family transfers or foreign loans. In one case, a Chinese student was found to own eight apartments and earn rental income without reporting it. In 2024 alone, over 400 cases of illegal real estate deals by foreigners were detected—nearly half involved Chinese nationals.

Calls for Reciprocity

In China, foreigners must live for over a year to buy property, and land purchases are completely prohibited. South Korea, however, places minimal restrictions on foreign land or home purchases. This legal asymmetry has made Korea a favorable destination for foreign real estate investors.

Government Response and Legislative Moves

• Proposed bill for a permit system for foreign land deals in metropolitan areas
• Reciprocity principle: stricter rules for nationals from countries that limit Korean investments
• Restrictions on land deals near military zones or diplomatic facilities
• Seoul government plans to investigate foreign ownership and consider local regulations

FAQ

Q: Why can Chinese nationals buy property easily in Korea?
A: Korea has lenient regulations on foreign buyers, and tracking the funding source is difficult due to international transfers.

Q: How are local Koreans treated differently?
A: Koreans face stricter financial rules and taxation. Foreigners often escape these obligations due to jurisdiction limits.

Q: What can Korea do to regulate foreign real estate activity?
A: Suggested measures include applying reciprocity, a metropolitan permit system, and tighter verification of funding sources.

Q: How are other countries handling this?
A: Australia and Canada have banned or limited foreign property purchases after housing prices surged due to Chinese investment.

Conclusion

The influx of foreign capital, especially in Seoul’s luxury housing market, threatens fair access and market stability. Stricter laws ensuring equal responsibility for both domestic and foreign buyers are needed. Legislative action is essential for a balanced real estate ecosystem.

Source: Sosan Daily | All rights reserved.