Lawmaker seeks to prohibit Chinese from buying land
An apartment complex in Seoul. Korea Times file
By Lee Kyung-min
An opposition lawmaker is seeking to prohibit land purchases by Chinese citizens, whose presence is increasing rapidly in the real estate market here.
Rep. Hong Seok-joon of the main opposition People Power Party said the ban is needed since Koreans cannot buy land in China, yet Chinese investors are raking in profits from property speculation, a key culprit behind the rapid increase of housing prices in Korea.
This in his view violates the rule of reciprocity that governs international relations and treaties, whereby favors, benefits or penalties that are granted by one state to the citizens or legal entities of another, should be returned in kind.
“Chinese people continue to make hefty investments and net subsequent capital gains in the Korean real estate market, with their market presence soaring at an alarming rate. Measures should be taken to limit the purchases given Korean people are not allowed to do the same in China, and the level will be determined following a review of similar cases overseas,” Hong said.
The move was triggered by data submitted to Hong from Statistics Korea and the Ministry of Land, Infrastructure and Transport for a session of the National Assembly Special Committee on Budget and Accounts.
The data showed Chinese-owned land amounted to 19.3 square kilometers in 2019, over a 14-fold increase from 3.69 square kilometers in 2011. On the basis of officially appraised land prices, the land value more than tripled to 2.5 trillion won ($2.2 billion), from 765.2 billion won over the same period.
On the basis of the size of land, Chinese landowners accounted for 7.76 percent of foreign nationals who owned land in 2019, nearly quadruple the 1.93 percent recorded in 2011.
On the basis of officially appraised land prices, the figure jumped to 8.38 percent, from 3.06 percent.
The problem should be promptly addressed and resolved, according to a group of concerned professors cited by the lawmaker.
In August, the Professors' Solidarity for Freedom & Justice claimed that in China there is no concept of owning land permanently, and said the moves by Chinese nationals seeking to increase personal assets overseas must be brought under control through government regulation.
This in their view is an inevitable course of action because the speculative forces are gaining ground in Korea where a dozen government real estate policies put in place to curb speculation and stabilize house prices have resulted in abject failure.
Data from the Citizens' Coalition for Economic Justice (CCEJ) released Wednesday showed that apartment prices in Seoul spiked 58 percent in the first three years of the Moon Jae-in administration.
The increase was as high as 62 percent when measured in terms of official appraised land prices.
The civic group said the market price of 3.3 square-meters of land jumped to 41.56 million won over the past three months, up 58 percent from 26.25 million won.
This is 4.5 times faster than the 3.44 million won increase during the combined nine years served by former Presidents Lee Myung-bak and Park Geun-hye.