Surging property prices have become a political liability for President Lee Jae-myung. - Photo: Pixabay file
SEOUL: South Korea has introduced new restrictions on foreign property purchases in the greater Seoul area, its latest effort to curb housing prices.
The new measures unveiled by the government on Thursday (Aug 21) will require foreigners to get prior approval to buy a property starting Aug 26.
Those granted approval must move into the home within four months of receiving permission and reside there for at least two years after the purchase, the land ministry said in a statement, adding that the policy will remain in effect for one year.
The measures are aimed at countering speculation in the housing market, the ministry added. The number of housing transactions by foreigners has increased by an average of 26% annually since 2022, rising from 4,568 that year to 7,296 in 2024, the ministry said. Chinese nationals account for 73% of those purchases, followed by US citizens at 14%.
Gyeonggi Province accounted for 62% of such purchases in the Seoul metropolitan area, followed by Incheon at 20%.
Surging property prices have become a political liability for President Lee Jae Myung, who took office in June pledging to ease living costs. The Bank of Korea’s rate cuts since last year have fueled demand, adding to speculative buying.
Lee’s administration tightened mortgage lending in June, but apartment prices remain elevated and have risen for 29 consecutive weeks. The property boom, coupled with swelling household debt, has discouraged the Bank of Korea from cutting rates further, even as the export-driven economy shows signs of weakness following new US tariffs.
Total household debt rose by 24.6 trillion won ($17.7 billion) in the April-June period, the biggest quarterly gain since the third quarter of 2021. - Bloomberg
