It turned out that last year saw the most nonresident buyers of collective buildings such as apartments in Seoul in four years. The number of people living outside the city who bought collective buildings in Seoul held in the 30,000s starting in 2022, the tail end of the period of soaring home prices, but grew last year to nearly 46,000. Despite strict lending rules and limits on gap investing (purchases with jeonse tenants in place), investment demand for collective buildings in Seoul rose.
According to the court's Registration Information Plaza on Jan. 6, the number of nonresidents who bought collective buildings (apartments, low-rise apartments, and officetels) in Seoul last year totaled 45,822, up 18.6% from the year before. Last year's nonresident investment in Seoul collective buildings was the largest since 2021 (52,461), when home prices were surging. The number of nonresident buyers of collective buildings in Seoul began to fall to 38,234 in 2022 and decreased to 32,774 in 2023. In 2024, out-of-town investment in Seoul rose slightly to 38,621 but still remained in the 30,000s.
As nonresident purchases of collective buildings in Seoul increased last year, nonresidents accounted for 25.1% of all buyers of collective buildings in the city (182,750 people). In other words, one out of every four buyers of collective buildings in Seoul was a nonresident.
The government repeatedly tightened real estate regulations last year, but the tide of nonresident investment did not abate. The number of nonresidents who bought collective buildings in Seoul last year stood in the 2,000–3,000 range through May, before the June 27 lending restrictions. However, it rose to the 4,800 range in June and stayed in the 4,000s through Oct.
When the government announced the Oct. 15 measures and put all of Seoul under triple regulations such as land transaction permission zones and regulated areas, the number of nonresidents who bought collective buildings in Seoul fell to the 3,200 range in Nov., right after the announcement, but climbed back to the 4,000 range in Dec.
Areas where nonresidents bought many collective buildings were the Gangnam region and the Han River belt. Among the three Gangnam districts, Songpa District saw the most nonresident investment with 3,417 buyers. Gangnam District and Seocho District followed with 2,501 and 2,115, respectively. In the Han River belt, buying interest was strong in Gangdong District (3,024), Mapo District (2,998), Dongjak District (2,418), and Seongdong District (2,130). Nonresident buying was also sizable in Yeongdeungpo District (2,891) and Gangseo District (2,590).
Most nonresidents who bought collective buildings in Seoul lived in the greater Seoul area. The largest group was those living in Gyeonggi Province, with 27,801 buyers. Incheon followed with 3,703.
Outside the capital region, the largest group was residents of South Gyeongsang Province with 2,419, followed by South Chungcheong (1,483), Gangwon (1,290), Busan (1,220), North Gyeongsang (1,129), and Daejeon (1,050).
The standout surge in nonresident investment in collective buildings in Seoul stems from a widening housing polarization between Seoul and other regions. According to the Korea Real Estate Board (REB), last year's cumulative weekly rise in Seoul apartment prices was 8.71% for the year, the highest since 2013. In contrast, home prices outside the capital region fell 1.13%.
Kim Hyo-seon, chief real estate expert at NH NongHyup Bank's All100 Advisory Center, said, "In the past, whether dwellings or neighborhood commercial properties, there was a tendency to move to a slightly better location within one's own area of residence, but now the landscape has completely changed, with dwellings looking to Seoul and, in particular, most neighborhood commercial properties for investment focusing on Seoul."
Ham Young-jin, head of the Real Estate Research Lab at Woori Bank, said, "In Seoul, especially in the Gangnam area, housing prices have risen significantly, so demand may have flowed in on expectations before regulations were tightened," adding, "Among collective buildings, there was likely investment demand for officetels, multi-family, and row houses, which are not subject to the land transaction permission system and do not require actual residence."