Foreigners Sweeping Up Domestic Real Estate... 70% Increase in 4 Years

Assemblyman Kim Sang-hoon "The same purchase procedures as natives... but regulations are harsher on natives"

[Asia Economy Reporter Onyu Lim] The area of land owned by foreigners in South Korea has increased by about 70% over the past four years. In particular, land parcels owned by Chinese nationals have increased by 120%. There are calls for regulatory measures on foreign land ownership from the perspective of the principle of reciprocity.

According to the status of foreign land ownership received by Kim Sang-hoon, a member of the People Power Party, from the Ministry of Land, Infrastructure and Transport on the 20th, the area of land owned purely by foreigners, excluding overseas Koreans and corporations, was 20,412,000㎡ as of the first half of last year. This is a 70% increase compared to 11,998,000㎡ in 2016. In terms of the number of parcels, it increased by 37% from 111,667 to 153,185.

In particular, the increase in land ownership by Chinese nationals was remarkable. The number of land parcels owned by Chinese nationals, which was 24,035 in 2016, rose to 54,112 in the first half of last year, an increase of about 30,000 parcels (120%). The official land price also showed a similar trend. During the same period, the total official land price of land owned by Chinese nationals increased by 30%, from 2.08 trillion won to 2.7 trillion won. This rise was notable compared to the United States, which increased by 4% (560 billion won), and Japan, which decreased by 4.5% (120 billion won).

The regions where foreign land ownership is concentrated were Seoul and the metropolitan area including Gyeonggi Province. In particular, in Gyeonggi Province, the number of parcels increased by 58%, from 27,186 in 2016 to 43,034 in the first half of last year. Chinese nationals owned 17,380 parcels in Gyeonggi Province alone, recording a 180% increase.

Countries such as New Zealand, Australia, and Singapore have established regulatory measures on foreign real estate acquisition. However, in South Korea, except for land subject to permission and reporting under the Foreign Exchange Transactions Act, foreigners can acquire land through the same procedures as nationals.

As a result, Chinese nationals have already emerged as major players, holding 11,267 parcels, which is 73% of foreign-owned parcels in Jeju Island. However, Koreans can only hold fixed-term land use rights and building ownership rights in China.

Representative Kim said, "The procedures for purchasing land are almost the same, but various regulations are harsh on nationals," and pointed out, "It is necessary to correct fairness through reasonable institutional improvements in line with the principle of reciprocity."