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South Korea Imposes Conditional Ban on Foreign Property Purchases

Korea introduces residency rules for foreign buyers, reflecting a wider trend of nations tightening property access.

Korea introduces residency rules for foreign buyers, reflecting a wider trend of nations tightening property access.

South Korea has imposed restrictions on foreign property purchases across the Seoul Metropolitan Area, requiring government approval and mandatory residency requirements as overseas investors increasingly exploit loopholes in domestic mortgage rules. 

The Ministry of Land, Infrastructure and Transport announced that foreign buyers must now obtain permits before acquiring homes in Seoul, 23 cities and counties in Gyeonggi Province, and seven districts in Incheon, effective today.

The restrictions mandate that foreign purchasers move into their properties within four months and maintain residency for at least two years. Violations carry penalties of up to 10% of the property’s value, with potential contract nullification for non-compliance.

Foreign property transactions in the Seoul metropolitan area have surged from 4,568 in 2022 to 7,296 in 2024, representing annual growth exceeding 26%. Through July 2025, foreigners completed 4,431 residential purchases, placing the year on track to surpass 7,600 transactions.

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The policy directly targets speculative buying that intensified after South Korea’s June mortgage restrictions capped domestic household loans at 600 million won ($439,000). While South Korean buyers face stricter lending limits, foreign investors continued accessing high-end apartments through overseas financing, creating market distortions that officials deemed unsustainable.

Recent transactions have shattered price records across Seoul’s premium districts. A US national purchased a 240-square-meter Hannam district apartment for 12 billion won ($8.7 million) in April, establishing a new building record. A Maltese buyer acquired a luxury Gangnam villa for 7.4 billion won in March.

First Vice Land Minister Lee Sang-kyung emphasized that the measure aims to “prevent speculative foreign capital inflows and stabilize house prices, thereby contributing to housing welfare for our citizens.” The government has pledged enhanced scrutiny of funding sources and detailed examination of financing documentation.

Seoul, South Korea

Foreign buyers utilizing South Korea’s property manager system have drawn particular attention from regulators. Since August 2023, foreign buyers have purchased 497 residential properties in the capital region through this mechanism, with US nationals accounting for more than 60% of transactions and Chinese nationals representing approximately 22%.

Chinese citizens own 56,301 residential units nationwide, leading all foreign nationalities, followed by Americans with 22,031 properties, Canadians with 6,315, and Taiwanese with 3,360 units according to government data.

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Global Trend Toward Restricting Foreign Homeownership

South Korea’s restrictions align with an accelerating global trend as nations implement increasingly stringent controls on foreign property ownership. 

Canada has maintained a complete ban on foreign residential purchases since 2023, recently extending the prohibition through January 2027 following evidence that overseas money has intensified housing affordability concerns across major urban centers.

Australia implemented a two-year moratorium on foreign purchases of established dwellings in April 2025, running through March 2027. The policy allows foreign investment in new construction while blocking acquisition of existing homes, reflecting concerns about housing supply constraints.

However, Juwai IQI Co-Founder and Group CEO Kashif Ansari argues that “with New Zealand partially lifting its ban and South Korea imposing its partial ban, the number of countries with bans will remain the same.” New Zealand has indeed decided to partially reverse its foreign buyer restrictions as the country attempts to attract successful foreign residents and investment.

Ansari notes that “the biggest wave of anxiety about buyers from overseas crested all over the world in 2018,” marking the peak of nearly a decade of cross-border capital flowing into real estate markets across Asia, Oceania, Europe, and North America. 

He observes that “in the two years leading up to 2018, Canada’s two largest provinces, six of Australia’s eight states and territories, and New Zealand’s and Australia’s national governments all increased their foreign buyer taxes or restrictions.”

Singapore has completely prohibited foreign purchases of public housing apartments while imposing an additional 60% tax on private dwelling purchases by foreign buyers, separate from standard transaction levies.

Singapore doesn’t allow foreigners to purchase public housing

The United States has witnessed an unprecedented surge in state-level foreign ownership restrictions. According to Committee of 100 data, 30 states have passed 54 bills limiting foreign property ownership since 2021, with 17 bills becoming law in 2024 alone. Of the 414 bills introduced by states and Congress since 2021, 266 contain provisions restricting Chinese property ownership specifically.

Chinese businesses and citizens own 0.6% of all privately held foreign-owned agricultural property in the United States, representing approximately 0.021% of total privately held agricultural land nationwide. This amounts to roughly one out of every 4,800 acres, according to Department of Agriculture data.

The effectiveness of such measures remains questionable. Ansari observes that “there hasn’t been a single case of foreign buyer bans solving housing affordability and supply crises because foreign buyers are never the root cause.” He notes that “Canada and Australia have both found that bans have made little difference.”

Regarding potential economic consequences, Ansari explains that “we haven’t documented a causal link between foreign buyer bans and FDI” and that “most FDI is large-scale corporate investment that is determined by commercial factors rather than the housing market.” However, he suggests that foreign buyer restrictions might signal that “outside investment is not welcome,” potentially indicating broader regulatory barriers.

Seoul, South Korea

South Korea’s restrictions represent the first time governments have introduced such regulations specifically to stabilize real estate markets, as previous foreign ownership limitations focused primarily on national security concerns. 

The one-year designation period allows policymakers to assess market impacts before determining whether to extend or modify the program beyond August 2026.

Ansari suggests that “you can expect some foreign buyer bans to be lifted as countries compete to attract capital and stimulate their economies,” indicating that current restrictions may prove temporary rather than permanent policy shifts.

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