Foreign home buying in Seoul drops sharply after land permit rules
Overseas buyers seen as regulation-sensitive, not market drivers
A visitor gazes at apartment complexes from Mount Nam in Seoul, May 8. Yonhap
Home purchases by foreign nationals in Seoul and surrounding areas have dropped sharply after the government designated the regions as land transaction permit zones for non-Korean buyers last August, government data showed Friday.
This suggests that tighter regulations may have curbed speculative demand amid controversy over claims that overseas buyers, particularly Chinese nationals, are fueling demand for luxury housing in upscale neighborhoods.
According to data released by the Ministry of Land, Infrastructure and Transport, housing transactions involving foreign buyers in Seoul and surrounding areas between September 2025 and April 2026 declined by 28 percent to 3,304 from 4,617 a year earlier.
The decline was most evident in Seoul, where home purchases by foreign nationals fell 44 percent to 545 from 968. Transactions also decreased in Gyeonggi Province, down 23 percent to 2,205 from 2,857, and in Incheon, down 30 percent to 554 from 792.
In the capital, the drop was particularly pronounced in affluent districts such as Gangnam, Seocho, Songpa and Yongsan districts, where purchases by foreign nationals fell 58 percent from a year earlier.
The drop is notable given that foreign ownership of homes in Korea continued to increase, reaching 108,231 units as of December 2025, up 8 percent from a year earlier, indicating that the regulations may have had a particularly strong effect in permit zones.
Land transaction permit requirements, introduced last August across all of Seoul and parts of Gyeonggi Province and Incheon, restrict home purchases by foreign nationals to actual residency purposes, a measure aimed at curbing speculative demand and addressing concerns over unequal treatment between domestic and foreign buyers.
Under regulations, foreign nationals must obtain government approval before purchasing homes in designated areas. Approved buyers are required to move into the property within four months and reside there for at least two years.
"Stricter requirements and approval procedures under the land transaction permit system appear to have contributed to the overall decline in transactions by foreign nationals in the designated areas," a land ministry official said.
"We will continue to closely monitor suspicious transactions and investigate potential illegal activities involving foreign buyers, while regularly disclosing relevant information to provide the public with an accurate picture of foreign real estate ownership," the official added.
Some analysts cautioned against attributing the decline solely to the regulations, noting that higher borrowing costs, rising home prices in the capital and a slowdown in the property market may have contributed to lower demand.
Notices on property listings are posted at a real estate agency in Seoul, May 11. Yonhap
The data comes amid recurring debate over foreign ownership of Korean real estate, particularly by Chinese nationals. Critics have alleged that purchases of high-end properties by Chinese buyers distort the housing market and contribute to rising home prices.
The overall decline in transactions by foreign nationals following tighter rules, however, indicates that they are a segment particularly sensitive to regulatory changes rather than a key driver of overall housing demand, according to the ministry.
Government data also suggests that foreign ownership remains limited relative to the overall housing market. As of December 2025, homes owned by foreign nationals accounted for just 0.55 percent of the country's 19.65 million housing units.
Of the total, Chinese nationals accounted for the largest share, owning about 61,000 homes, or 56.8 percent of the foreign-owned total. They were followed by U.S. nationals with about 23,000 homes and Canadians with roughly 6,500.
Earlier this month, a local media report suggested that Chinese nationals had "swept up" 944 apartments in Seoul's Gangnam District between January and April.
The land ministry dismissed the report as false, saying foreign ownership transfer registrations for apartment and other residential properties in Seoul during that period involved 592 foreign nationals in total, of whom 218 were Chinese nationals. Only five Chinese buyers purchased properties in Gangnam, according to the ministry.
President Lee Jae Myung also criticized the report, writing on his X account that it "appears to be fake news intended to stoke anti-China sentiment."