Order to Investigate Foreign Real Estate Ownership
Request for Countermeasures Submitted to the Ministry of Land, Infrastructure and Transport
As concerns have been raised about potential market disruption due to the recent increase in real estate purchases by foreigners in South Korea, Seoul Mayor Oh Sehun has ordered a thorough investigation and the development of countermeasures.
According to the Seoul Metropolitan Government on June 2, Mayor Oh instructed officials at a morning executive meeting to clearly identify the current status of real estate transactions involving foreigners and to respond accordingly. He also ordered the city to promptly recommend to the Ministry of Land, Infrastructure and Transport, which oversees national real estate policy, that measures be put in place to prevent any harm to domestic citizens regarding foreign purchases of land and housing.
According to the "Statistics on Land and Housing Ownership by Foreigners" released by the Ministry of Land, Infrastructure and Transport at the end of last year, a total of 98,581 foreigners owned 100,216 housing units nationwide. Of the homes owned by foreigners, 39,144 units (39.1%) were in Gyeonggi Province, 23,741 units (23.7%) in Seoul, and 9,083 units (10.0%) in Incheon, showing a concentration in the greater Seoul metropolitan area. Of the total 267,905,000 square meters of land owned by foreigners, the metropolitan area accounted for about 21%, or 56,852,000 square meters.
An official from the city explained, "Unlike domestic citizens, who must go through various regulations and complicated procedures such as financial and tax requirements when purchasing real estate, foreigners can purchase property relatively easily, raising concerns about reverse discrimination. In addition, when Koreans attempt to purchase real estate overseas, such as in China, they still face a variety of regulations, which does not align with the principle of reciprocity, a basic tenet of diplomacy."
For example, it is known that China currently imposes strict regulations on real estate transactions by Koreans, including a requirement to reside in the property for more than a year, a prohibition on land purchases, and restrictions on purchases for residential purposes.
Accordingly, the city plans to investigate and analyze the impact of excessive real estate purchases in Seoul by foreigners, including Chinese nationals, on the real estate market and on fairness for domestic citizens. Based on the findings, the city will develop systematic countermeasures and submit recommendations to the Ministry of Land, Infrastructure and Transport.
Meanwhile, foreign countries are also taking measures to prevent excessive real estate purchases by foreigners. In Canada, after concerns were raised that foreign capital, particularly from China, was flowing into the real estate markets of major cities such as Vancouver and driving up housing prices, the Ministry of Finance extended the ban on foreign home ownership by two years, moving the expiration date from January 1, 2025, to January 1, 2027.
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