Even 'Big-Spending' Chinese Buyers Avoid... Real Estate Purchases Decline for 3 Consecutive Months

Interest Rate Freeze, Political Instability, and Alternative Investments
Even Foreign Buyers Are Taking a Wait-and-See Approach

The number of foreigners shopping for apartments in Korea has plummeted this year. In particular, buying by Chinese nationals, who are considered major players in the real estate market, has shrunk significantly.

According to the “Status of Buyers Applying for Ownership Transfer Registration Due to Sale” on the Court Registration Information Plaza on the 12th, the number of Chinese nationals who purchased real estate in Korea (including collective buildings, land, and buildings) last month and then applied for ownership transfer registration was tallied at 634. This represents a 32% decrease compared with the same month last year (928). The number of Chinese buyers has been declining for three consecutive months, from 1,031 in October last year to 909 in November and 755 in December. Compared with the monthly average of around 1,000 throughout last year, the weakening of buying interest is clear.

Experts cited uncertainty as the reason for the decline in buying. Go Jongwan, head of the Korea Asset Management Institute, said, “From March to September last year, the real estate market showed an upward trend, but since October it has entered a downward correction phase,” adding, “The phase of declining Chinese purchases is emerging in tandem with this period.” He went on to say, “The impeachment-driven political situation has heightened uncertainty for the Korean economy, and the market itself is in a slump.”

The perception that there are now better investment destinations than the Korean real estate market has also had an impact. Park Wongap, senior expert at KB Kookmin Bank, said, “As global investment trends have recently shifted, investors are moving their funds into U.S. stocks such as Nvidia and Tesla,” and added, “Chinese investors tend to apply strict criteria and be cautious; as they do not see clear expectations of price increases in the Korean real estate market, they appear to be hesitating to buy.”

Even among foreigners, end-users have shifted to a wait-and-see stance. Foreigners who buy homes in Korea can largely be divided into investors and end-users. Investors include those who previously invested in Jeju Island to obtain visa benefits under real estate investment immigration programs, as well as those who have accumulated high-priced homes in prime areas of Seoul. End-users are those who come to Korea for jobs and end up buying homes after settling in places such as Guro District in Seoul or the city of Ansan. Experts believe that it is the slowdown in activity among these end-users that has led to fewer transactions.

Park noted, “Foreign investment in the domestic real estate market tends to have strong herd behavior, but recently multi-home owners are reluctant to make additional purchases, and gap investing has almost disappeared.” He continued, “The main trend in the current market is end-users in their early 40s upgrading their residential areas, but the inclination to own two or more homes has faded,” adding, “Chinese buyers are showing a pattern similar to that of domestic buyers.”

This content was produced with the assistance of AI translation services.