Seoul Foreign Housing Deals Halved... Gangnam 3 Districts and Yongsan See 65% Plunge [Real Estate AtoZ]

51% Drop in Seoul from September to December Last Year
Seocho District Posts Largest Decline with 88% Plunge

View of apartment complexes in the Seocho and Yongsan areas as seen from Namsan in Seoul. Yonhap News

After the government designated Seoul and other parts of the greater metropolitan area as land transaction permit zones for foreign buyers last year, foreign purchases of housing dropped sharply. This is interpreted to mean that a considerable portion of past demand had been for investment rather than for actual residence. In areas with many high-priced homes, such as the three Gangnam districts, the decline among American buyers was particularly notable.

According to an analysis of foreign housing transactions released by the Ministry of Land, Infrastructure and Transport on the 12th, the number of housing transactions by foreigners in Seoul between September and December last year was 243, down 51% from 496 during the same period a year earlier. In Gyeonggi Province, the number fell by 30%, and in Incheon, by 33%.

Earlier, starting August 26 last year for a period of one year, the government designated major areas of the Seoul metropolitan area as land transaction permit zones for foreign housing transactions. For apartments in Seoul, transactions in the three Gangnam districts and Yongsan District, which were already speculative overheating districts and adjustment target areas, plunged by 65%. In particular, in Seocho District, the number of transactions fell from 92 to 11, an 88% drop, marking the largest decline among the 25 autonomous districts. In Gyeonggi Province, Bucheon saw the steepest drop at 51% (from 208 to 102 transactions), while in Incheon, Seo District recorded a 46% decrease (from 50 to 27 transactions).

The higher the price range, the more pronounced the decline in transactions. Deals involving high-priced homes worth more than 1.2 billion won decreased by 53% (from 206 to 96 transactions), whereas transactions for homes priced at 1.2 billion won or less fell by only 33%.

By nationality, transactions by Chinese buyers decreased by 32% (from 1,554 to 1,053), while those by American buyers dropped by 45% (from 377 to 208). Among American buyers, 48% of the properties traded were priced above 600 million won, whereas for Chinese buyers the share was only 10%, indicating that Americans were relatively more focused on high-priced homes.

Kim Itak, First Vice Minister of the Ministry of Land, Infrastructure and Transport, said, "The decrease in foreign housing transactions is a signal that demand which had been fueling market overheating is declining," adding, "We will effectively monitor compliance with actual residence obligations and establish an order in the real estate market that is centered on genuine end-user demand."

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