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By Yoon Ja-young
Chinese buyers are increasing real estate purchases in Korea, leading to concerns among some Koreans who are suffering from soaring housing prices.
According to data from the Ministry of Land, Infrastructure and Transport submitted to Rep. Hong Seok-joon of the main opposition People Power Party, foreigners owned 157,489 real estate properties as of 2020, which is 2.2 times more than 2011. Of this number, 40,431 were apartments.
The real estate owned by Chinese nationals especially rose steeply. The number of properties owned by Chinese nationals totaled 57,292 in 2020, which is up 16.3 times from 2011. They account for 36.37 percent of total foreign ownership as of last year.
They are especially purchasing real estate in Seoul, with the number of properties under Chinese ownership increasing 11.1 times from 2011 to 2020. Chinese real estate ownership increased 26.6 times in Gyeonggi Province which surrounds the capital. On Jeju Island, a popular tourist destination, it grew 112 times to 11,219 properties. They are also purchasing real estate in Sejong, which is highly popular among real estate investors at this time. The number of Chinese-owned properties grew 85.3 times there.
The increasing real estate purchases by foreigners is causing concern over their negative impact on the real estate market, according to Rep. Hong, who said the same problem has become a contested political topic in countries such as Australia, Canada and New Zealand.
In online communities for sharing housing market information, some users are posting concerns that foreign property investors, especially from China, are pulling up housing prices even further and the Moon Jae-in administration has done little to solve the problem.
A unit in Gyeongnam Marina Apartment in Busan's Haeundae District, which made headlines due to its steep price increase, later turned out to have been purchased by a Chinese national. The 84.93-square-meter unit on the seventh floor of the seaside apartment building was purchased for 1.7 billion won ($1.47 million) in March by a Chinese national. It is indeed a steep rise when considering that a similar unit on the 12th floor sold for 765 million won ($663,600) only three months earlier.
"The 1.7 billion won purchase by a Chinese national of course pulled up the price. Other homeowners think they can also get that much. They even canceled plans to sell their apartments on expectation that the prices will rise further," said an agent at Haegang Real Estate Agency near the apartment. However, she said that she hasn't received further inquiries from potential Chinese buyers.
The government introduced layers of regulations to curb the steeply soaring housing prices, but they have failed to stabilize the surging prices and do not apply to foreigners. A person who submitted a petition to the Cheong Wa Dae website said real estate purchases by foreign nationals are disturbing the market due to lack of proper regulation. The petitioner said foreigners should also be subject to the same rules as Koreans.
Rep. Hong said that it could be a serious problem in the future as Chinese people are allowed to own real estate in Korea with no restrictions while Korean nationals cannot own land in China.
"While Korean nationals cannot own land in China, Chinese nationals can own Korean land and the ratio of their ownership is increasing steeply. This can become a state-level problem in the long run so it should be restricted in terms of reciprocity," the lawmaker said.
