A visitor gazes at apartment complexes from Mount Nam in Seoul, May 8. Yonhap

Home purchases by foreign nationals in Seoul and surrounding areas have dropped sharply after the government designated the regions as land transaction permit zones for non-Korean buyers last August, government data showed Friday.

This suggests that tighter regulations may have curbed speculative demand amid controversy over claims that overseas buyers, particularly Chinese nationals, are fueling demand for luxury housing in upscale neighborhoods.

According to data released by the Ministry of Land, Infrastructure and Transport, housing transactions involving foreign buyers in Seoul and surrounding areas declined by 28 percent to 3,304 between September 2025 and April 2026, from 4,617 a year earlier.

The decline was most evident in Seoul, where home purchases by foreign nationals fell 44 percent to 545 from 968. Transactions also decreased in Gyeonggi Province, down 23 percent to 2,205 from 2,857, and in Incheon, down 30 percent to 554 from 792.

In the capital, the drop was particularly pronounced in affluent districts such as Gangnam, Seocho, Songpa and Yongsan districts, where purchases by foreign nationals fell 58 percent from a year earlier.

The drop is notable given that foreign ownership of homes in Korea continued to increase, reaching 108,231 units as of December 2025, up 8 percent from a year earlier, indicating that the regulations may have had a particularly strong effect in permit zones.

Land transaction permit requirements, introduced last August across all of Seoul and parts of Gyeonggi Province and Incheon, restrict home purchases by foreign nationals to actual residency purposes, a measure aimed at curbing speculative demand and addressing concerns over unequal treatment between domestic and foreign buyers.

Under regulations, foreign nationals must obtain government approval before purchasing homes in designated areas. Approved buyers are required to move into the property within four months and reside there for at least two years.

"Stricter requirements and approval procedures under the land transaction permit system appear to have contributed to the overall decline in transactions by foreign nationals in the designated areas," a land ministry official said.

Source: Korea Times News