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More Foreign Residents Cause Changes in Housing Lease Market
Foreign Influx
More Foreign Residents Cause Changes in Housing Lease Market
  • By Michael Herh
  • September 9, 2015, 07:45
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Apartment blocks light up the night sky in Seoul, South Korea.
Apartment blocks light up the night sky in Seoul, South Korea.

 

An increase in foreign residents in Korea is leading to fast expansion and variation of the housing lease market catering to foreigners. According to real estate market experts, residential areas favored by foreign residents are expanding into Mapo, Seoul, Songdo, Incheon, and Pyeongtaek, Gyeonggi-do from traditional foreign residential districts areas such as Hannam-dong, Itaewon, and Yongsan.

The Ministry of Government Administration and Home Affairs said that Korea had 1,741,919 foreign residents as of January 1 of this year. This figure accounts for 3.4 percent of Korea’s total population. Foreign residents in Korea numbered 540,000 in 2006, when Korea began to count them for the first time. Over the ten years, the figure more than tripled. The figure increased 11 percent from 1,569,470 in 2014.

In the past, the majority of foreign residents in Korea were U.S. soldiers and foreign embassy employees. These days, demographics varied into employees of foreign companies doing business in Korea, businesspeople, foreign students, and workers. Their residential areas are expanding into areas close to foreign companies, international exchange complexes, and foreign schools.

House leasing for foreign residents is preferred by lessors, since it is relatively less likely that monthly rent will not be paid. This is because rent are usually paid through a lump sum prepayment in this market.

In Seoul, Mapo-gu is emerging as an area popular among foreign residents, since it is close to airports and has strong access to the Yongsan International Business Complex and the Yeouido International Financial Center. The area also interests foreign residents with children, since it has Seoul Dwight Foreign School, a Japanese school, and a Chinese school in the area.

Foreign residents have been flocking to Songdo, Incheon since the opening of the GCF Office in the area. Songdo has branches of four U.S. universities.  U.S. military bases in Yongsan, Dongducheon, and Paju will move to Pyeongtaek by 2016. So, when they finished their moves to Pyeongtaek, the city will have an inflow of 80,000 to 100,000 U.S. soldiers and civilian employees of such bases.