Foreigners' homebuying falls to 3-year low as tougher transaction rules take effect

A tourist takes a photo of apartment complexes from Mount Nam in Seoul, Monday. Yonhap

Foreigners bought the fewest number of homes in nearly three years in Seoul and the greater capital area last month, reflecting the impact of a policy aimed exclusively at preventing speculative purchases by buyers from abroad, government data showed Monday.

Compiled by the Supreme Court, the online data on registered transactions, legal ownership rights and other nationwide real estate information showed 560 foreigners completed ownership transfers for multiunit buildings in Seoul, Gyeonggi Province and Incheon in October.

By nationality, Chinese nationals accounted for the largest share at 438, followed by Americans at 133 and Canadians at 33.

Last month’s figure is the lowest level since February 2023, when 427 foreigners purchased properties, ranging from apartments, the most popular housing option in Korea, to more affordable single-family homes and villas.

The tally also marks a decline for two straight months, down from 976 in September, following a period of consecutive increases earlier this year through August, when the number reached 1,051.

Industry officials attributed the slowdown to stricter regulations introduced on Aug. 26, designating all of Seoul and key areas in Gyeonggi Province and Incheon as restricted zones for foreign transactions.

Under the new rules, buyers from abroad can no longer purchase residential properties unless they intend to live in them.

Those who obtain prior approval must move into the property within four months and maintain actual residence for two years, effectively preventing speculative gap investments using existing rental contracts.

The measure followed public backlash related to a policy introduced June 27 that tightened mortgage caps for Korean nationals but not for foreigners.

Additional curbs introduced on Sept. 7 and Oct. 15 further widened speculation-prone zones and tightened mortgage caps, making it more difficult for Korean nationals to buy a home.

Kwon Dae-jung, a real estate professor at Hansung University, said the foreign land transaction permit is “now taking a toll on speculative buyers.”

He added that “restricting foreign property acquisitions to a limited extent, based on reciprocity with other countries, is necessary to stabilize the domestic real estate market.”