South Korea Restricting Foreign Home Buys

South Korea is cracking down on foreigners buying property in the nation’s capital.

On Thursday, the government revealed new restrictions on the Greater Seoul housing market meant to control housing prices, Bloomberg reported.

Under the new regulations, foreigners will have to obtain prior approval to buy property in the city. Buyers must move into the home within four months of receiving approval and live there for at least two years after the purchase. The policy is planned to stay in effect for one year.

The hope is that the increased scrutiny over non-South Koreans buying homes will cut down on speculation in the housing market.

Since 2022, housing transactions by foreigners have increased by an average of 26 percent. That year, there were 4,568 transactions; in 2024, there were 7,296, the South Korean housing ministry said, per Bloomberg. Of those purchases, 73 percent were made by Chinese nationals. U.S. citizens followed with 14 percent.

In the Seoul metropolitan area, Gyeonggi Province saw the lion’s share of foreign buys with 62 percent of those transactions. Incheon followed with 20 percent.

The Bank of Korea’s interest rate cuts over the past year have helped demand surge as speculative buying increases, according to Bloomberg. Last month, the Bank of Korea opted not to raise interest rates from 2.5 percent, potentially inflaming housing costs in an already competitive market.

The property boom and ballooning household debt has made the Bank of Korea cautious of cutting rates further. Last quarter, total household debt in the country rose by $17.7 billion, marking the biggest quarterly gain since the third quarter of 2021.

Apartment prices remain high and have continued to rise for 29 consecutive weeks. Home prices overall have increased 25.2 percent over the past year, PropertyWire reported, citing data from Knight Frank. Over a five-year period, Seoul saw an 81 percent rise in home prices. Low interest rates have helped make mortgages more attainable for interested buyers.

The new restrictions on foreign buyers go into effect Aug. 26.

— Chris Malone Méndez