Chinese Investors Buy Expensive Apartment Houses
Foreigners are increasing their purchase of real estates in Seoul with government regulations and rising housing prices making it increasingly difficult for locals to buy and sell houses in the capital city.
According to the Ministry of Land, Infrastructure and Transport, foreigners bought 1,718 buildings and houses in the city for the first five months of this year. In addition, the area of land owned by foreigners increased 3 percent to 248.7 square kilometers in 2019. It is approximately 0.2 percent of South Korea’s total land area. The areas of land owned by Americans and Chinese increased 3.4 percent and 2.8 percent, respectively.
The increasing real estate purchase is because of high rates of return and loose regulations and small taxes applied to foreigners. Especially, Chinese are even buying more and more expensive apartment houses such as those in Gangnam priced at two billion won to three billion won, traditional houses in Bukchon, and the Galleria Foret, which is one of the most expensive apartment houses in Seoul.
This also has to do with the Moon Jae-in administration’s strict loan regulations applied to locals. It is becoming increasingly difficult for them to trade real estate properties due to huge tax burden such as comprehensive real estate and capital gains taxes.