South Korea has imposed restrictions on foreigners purchasing real estate throughout the Seoul metropolitan area, requiring government approval and mandatory residency status, as foreign investors increasingly exploit loopholes in domestic mortgage regulations.
The Ministry of Land, Infrastructure, and Transport announced that foreign buyers must now obtain permits to purchase homes in Seoul, 23 cities and counties in Gyeonggi Province, and seven districts in Incheon. The new decision takes effect today.
The restrictions require foreign buyers to move into their properties within four months and reside there for at least two years. Violations carry a fine of up to 10% of the property's value, as well as possible contract cancellation if the requirements are not met.
This policy is directly aimed at curbing speculative purchases, which intensified after South Korea imposed mortgage restrictions in June, limiting domestic household loans to 600 million won (US$439,000). While South Korean buyers face stricter lending restrictions, foreign investors continue to purchase luxury apartments through foreign financing, creating market distortions that authorities have deemed unsustainable.
It is emphasized that this measure is aimed at preventing speculative foreign capital inflows and stabilizing housing prices, thereby contributing to the housing well-being of our citizens. The government has promised to strengthen oversight of financing sources and conduct detailed audits of financial documents.
According to government data, Chinese citizens own 56,301 residential units nationwide, the highest proportion among foreign nationals. They are followed by Americans with 22,031 properties, Canadians with 6,315, and Taiwanese with 3,360 properties.
Global Trend Toward Restricting Foreign Home Ownership
South Korea's restrictions are consistent with a growing global trend, as countries impose increasingly stringent controls on foreign home ownership.
Canada maintains a complete ban on foreign home purchases from 2023, recently extending the ban until January 2027 after evidence emerged that foreign money has increased concerns about housing affordability in major urban centers.
In April 2025, Australia imposed a two-year moratorium on foreign investor purchases of existing homes, which will last until March 2027. This policy allows foreign investors to invest in new construction but prohibits the purchase of existing homes, reflecting concerns about housing market constraints.
However, it is claimed that with New Zealand's partial lifting of the ban and South Korea's partial ban, the number of countries with bans will remain the same. New Zealand has indeed decided to partially lift restrictions on foreign buyers in an effort to attract successful foreign residents and investment.
The United States is experiencing an unprecedented surge in state-level restrictions on foreign property ownership. Since 2021, 30 states have passed 54 bills restricting foreign property ownership, with 17 of these bills not taking effect until 2024. Of the 414 bills introduced by states and Congress since 2021, 266 contain provisions specifically restricting property ownership by Chinese nationals.
Chinese companies and individuals own 0.6% of all privately owned foreign agricultural property in the United States, representing approximately 0.021% of the total privately owned farmland nationwide.
The effectiveness of such measures remains questionable. It has been noted that there has never been a single case where bans on foreign buyers have resolved housing affordability and supply crises, as foreign buyers are never the primary cause.
The restrictions imposed by South Korea mark the first time the government has introduced such rules specifically to stabilize real estate markets, as previous restrictions on foreign ownership were primarily focused on national security concerns.
The one-year designation period allows policymakers to assess the market impact before deciding to extend or modify the program beyond August 2026.
It is anticipated that some restrictions on foreign buyers will be lifted as countries compete to attract capital and stimulate their economies, suggesting the temporary nature of the policy changes.
If you are planning to obtain a residence permit, invest in a country's economy, or purchase foreign real estate, we invite you to a consultation with our firm. During a personal online meeting, we will thoroughly examine your questions and develop a step-by-step plan action for you.
The Ministry of Land, Infrastructure, and Transport announced that foreign buyers must now obtain permits to purchase homes in Seoul, 23 cities and counties in Gyeonggi Province, and seven districts in Incheon. The new decision takes effect today.
The restrictions require foreign buyers to move into their properties within four months and reside there for at least two years. Violations carry a fine of up to 10% of the property's value, as well as possible contract cancellation if the requirements are not met.
This policy is directly aimed at curbing speculative purchases, which intensified after South Korea imposed mortgage restrictions in June, limiting domestic household loans to 600 million won (US$439,000). While South Korean buyers face stricter lending restrictions, foreign investors continue to purchase luxury apartments through foreign financing, creating market distortions that authorities have deemed unsustainable.
It is emphasized that this measure is aimed at preventing speculative foreign capital inflows and stabilizing housing prices, thereby contributing to the housing well-being of our citizens. The government has promised to strengthen oversight of financing sources and conduct detailed audits of financial documents.
According to government data, Chinese citizens own 56,301 residential units nationwide, the highest proportion among foreign nationals. They are followed by Americans with 22,031 properties, Canadians with 6,315, and Taiwanese with 3,360 properties.
Global Trend Toward Restricting Foreign Home Ownership
South Korea's restrictions are consistent with a growing global trend, as countries impose increasingly stringent controls on foreign home ownership.
Canada maintains a complete ban on foreign home purchases from 2023, recently extending the ban until January 2027 after evidence emerged that foreign money has increased concerns about housing affordability in major urban centers.
In April 2025, Australia imposed a two-year moratorium on foreign investor purchases of existing homes, which will last until March 2027. This policy allows foreign investors to invest in new construction but prohibits the purchase of existing homes, reflecting concerns about housing market constraints.
However, it is claimed that with New Zealand's partial lifting of the ban and South Korea's partial ban, the number of countries with bans will remain the same. New Zealand has indeed decided to partially lift restrictions on foreign buyers in an effort to attract successful foreign residents and investment.
The United States is experiencing an unprecedented surge in state-level restrictions on foreign property ownership. Since 2021, 30 states have passed 54 bills restricting foreign property ownership, with 17 of these bills not taking effect until 2024. Of the 414 bills introduced by states and Congress since 2021, 266 contain provisions specifically restricting property ownership by Chinese nationals.
Chinese companies and individuals own 0.6% of all privately owned foreign agricultural property in the United States, representing approximately 0.021% of the total privately owned farmland nationwide.
The effectiveness of such measures remains questionable. It has been noted that there has never been a single case where bans on foreign buyers have resolved housing affordability and supply crises, as foreign buyers are never the primary cause.
The restrictions imposed by South Korea mark the first time the government has introduced such rules specifically to stabilize real estate markets, as previous restrictions on foreign ownership were primarily focused on national security concerns.
The one-year designation period allows policymakers to assess the market impact before deciding to extend or modify the program beyond August 2026.
It is anticipated that some restrictions on foreign buyers will be lifted as countries compete to attract capital and stimulate their economies, suggesting the temporary nature of the policy changes.
If you are planning to obtain a residence permit, invest in a country's economy, or purchase foreign real estate, we invite you to a consultation with our firm. During a personal online meeting, we will thoroughly examine your questions and develop a step-by-step plan action for you.