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Thirty percent of foreign home purchases intended for rental

Published: 03 Sep. 2025, 16:14

Foreigners look across the view from Namsan Mountain in central Seoul on April 28. [YONHAP]

Three out of every 10 foreigners who purchased homes worth over 600 million won ($430,000) in Korea over the past three years did so for rental purposes, not to live in them, raising concerns over speculative investment.

According to Rep. Shin Yeong-dae of the Democratic Party, who sits on the National Assembly’s Land Infrastructure and Transport Committee, 29.5 percent, or 591 of the 2,005 funding plans submitted by foreigners for home purchases exceeding 600 million won between January 2023 and July 2025, indicated plans to rent out the property.

The higher the purchase price, the greater the proportion used for rental purposes. In the 900 million to 1.2 billion won range, 36.6 percent of foreign buyers planned to lease the homes in both 2023 and 2024, rising to 38.4 percent this year. For homes priced over 1.5 billion won, the rental rate consistently exceeded 30 percent annually.

In contrast, the rental ratio among domestic buyers during the same period remained in the 29 percent range.

Analysis of how the properties were financed further underscored speculative behavior. Among foreigners who bought homes worth more than 1.2 billion won, more than 30 percent used borrowed funds — including loans and rental deposits — to finance over half of the purchase price: 38.4 percent in 2023, 36.2 percent in 2024 and 33.8 percent so far this year.

To curb such transactions, the government designated all of Seoul, seven districts in Incheon and 23 cities and counties in Gyeonggi as permit-required zones for foreign land transactions starting Aug. 26. In those areas, foreigners must obtain municipal approval to purchase housing units with an exclusive floor area of 6 square meters (64.6 square feet) or more. They are also required to move in within four months of purchase and reside in the property for at least two years.

Authorities also strengthened rules requiring foreigners to prove the source of overseas funds, and violators may face administrative fines.

"Speculative transactions by foreigners drive up housing prices and worsen housing conditions for ordinary people — a vicious cycle that must be broken," said Rep. Shin. "We hope the land transaction permit system introduced by the Lee Jae Myung administration takes root and contributes to protecting the housing rights of Korean citizens."

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY JEONG JAE-HONG [[email protected]]