After the June 27 household debt measures that limited the loan cap to 600 million won, the acquisition of real estate in Seoul by foreigners has increased. Foreigners can utilize loans from their country's financial institutions, thus they are not significantly affected by domestic loan regulations. In contrast, real estate transactions by nationals executing loans from domestic financial institutions have drastically decreased.
According to the court registration information plaza on the 23rd, the real estate transaction count for foreigners in collective buildings such as apartments and officetels in Seoul from July 1 to 18, once the loan regulations announced on the 27th of last month were fully implemented, totaled 120 transactions, marking a 14.3% increase compared to the same period the previous month. By nationality, the number of Chinese individuals was 57, a 35% surge from the same period last month. This was followed by the United States (35) and Canada (8).
On the other hand, the number of transactions by nationals in Seoul's collective buildings during the same period was 7,632, a decrease of 27.2%.
The increase in foreign real estate transactions is analyzed to be due to the ability to circumvent government loan regulations, unlike nationals. The government regulations apply only to domestic financial institutions, hence foreigners are not subject to the loan-to-value ratio (LTV) and debt service ratio (DSR) when executing loans from their financial institutions. They can also evade the total loan cap regulation of 600 million won established by the June 27 household debt management measures. Furthermore, they face fewer tax burdens compared to nationals.
Foreign ownership of dwellings surpassed 100,000 units for the first time at the end of last year. According to the Ministry of Land, Infrastructure and Transport's foreign land and housing ownership statistics as of the end of 2024, the number of dwellings owned by foreigners was recorded at 100,216 units, accounting for 0.52% of the total housing stock. The number of foreigners owning dwellings in Korea was 98,581. Of the dwellings owned by foreigners, 72,868 units (72.7%) are concentrated in the metropolitan area. In Gyeonggi Province, there are 39,144 units (39.1%), 23,741 units (23.7%) in Seoul, and 9,983 units (10.0%) in Incheon.
As discussions arise over reverse discrimination against nationals due to the asymmetry of regulations, there are moves in the political sphere to address this. Kim Eun-hye, a member of the People Power Party, proposed a bill to change the reporting system for foreign real estate transactions to a permitting system and to specify the principle of reciprocity. Lee Un-joo, a member of the Democratic Party of Korea, submitted a revision of the real estate transaction reporting law that would require foreigners to obtain prior approval and to reside for a minimum of three years when purchasing domestic real estate.