Foreign homeowner property sales surge in Seoul

Apartment complexes and housing areas in Seoul seen from Mount Nam, Sunday / Yonhap

The number of foreign homeowners selling properties in Seoul jumped sharply in August, particularly in the Gangnam area and the districts of Mapo, Yongsan and Seongdong.

Analysts say the surge reflects efforts to realize gains while bracing for tougher regulations on foreign real estate transactions.

According to data from the Supreme Court’s real estate registration system released on Sept. 11, a total of 248 foreigners filed applications for ownership transfers of housing units including apartments, villas and officetels last month.

That figure is up 34.8 percent from July’s 184 and marks the highest monthly tally since November 2019, despite the reporting period not yet being closed.

In contrast, sales by Korean owners edged down by 0.6 percent in the same period to 17,608 cases, highlighting a distinct trend among foreign sellers.

Concentrated sales in high-demand areas

By district, Gangnam recorded the most foreign sellers at 77, followed by Gwangjin with 21, Seongdong and Yongsan with 18 each, Songpa with 15, Seocho with 12, and Mapo and Jongno with nine each.

Foreign sales volumes in Seoul have been elevated throughout 2024. While 942 foreigners sold homes in 2022 and 1,061 in 2023, the figure rose to 1,388 last year. This year, 1,350 sales were logged between January and August, nearly matching the total for all of 2023.

Analysts point to newly tightened rules as the trigger. In March, the government designated Gangnam, Seocho, Songpa and Yongsan as special permit zones requiring approval for purchases, while the June 27 measures further capped housing loans at 600 million won ($437,000).

At the same time, critics said foreigners continued “real estate shopping” under relatively looser rules. Lawmakers have since introduced multiple bills to toughen procedures for foreign buyers, and in June the Seoul Metropolitan Government announced it would scrutinize financing sources more closely and conduct detailed investigations into transactions deemed suspicious.

In mid-August, new restrictions extended the new permitting rules to the greater capital region, a move analysts say drove up sales by non-citizens. From Aug. 21, when the policy was announced, through Sept. 10, a total of 198 non-citizens sold housing units in Seoul, exceeding the 184 transactions recorded for all of July.

“Given the timing and decent sale prices, it looks like foreign owners sought profits while preparing for tighter rules,” said a real estate agent in Yongsan.

Analysts believe the restrictions will curb speculative demand. Ham Young-jin, head of Woori Bank’s Real Estate Research Lab, said, “In addition to requiring proof of actual residence, authorities are thoroughly checking financing and preventing fake residency claims. This should help reduce speculative demand based on capital gains.”

This article from the Hankook Ilbo, a sister publication of The Korea Times, is translated by a generative AI and edited by The Korea Times.