Seoul, Gyeonggi, Incheon Foreign Land Transaction Permit Zones Extended for One Year

South Korea's Ministry of Land, Infrastructure, and Transport announced on August 20th the extension of designated foreign-invested land transaction permit zones for one year. This measure aims to prevent speculative real estate investment by foreigners, a concern that prompted the initial designation in August of the previous year.

The permit zones encompass all of Seoul, 23 cities and counties in Gyeonggi Province (excluding Yangju, Icheon, Uijeongbu, Dongducheon, Yangpyeong, Yeoju, Gapyeong, and Yeoncheon), and nine autonomous districts in Incheon (Michuhol, Yeonsu, Namdong, Bupyeong, Gyeyang, Seo-gu, Geomdan, Yeongjong, and Jemulpo, excluding the former Dong-gu area). The boundaries remain the same as the previous designation, with adjustments made to reflect Incheon's administrative district changes in July.

The regulations apply to transactions of detached houses, multi-family homes, apartments, and other residential properties within these zones. The size thresholds remain unchanged: over 6 square meters for residential areas and over 15 square meters for commercial areas. The government implemented these measures following reports of foreigners purchasing high-priced properties for speculative purposes, without facing domestic loan regulations and without residing in the properties.

Data indicates the policy's impact: from September of last year to June of this year, foreign housing transactions in the Seoul metropolitan area decreased by 27% to 4,397 cases, compared to 6,024 cases in the same period the previous year. Reductions were observed across regions, with Seoul seeing a 37% decrease, Gyeonggi Province 23%, and Incheon 29%. By nationality, US investors saw a 40% decrease, and Chinese investors a 24% decrease. The Gangnam 3 districts (Gangnam, Seocho, Songpa) and Yongsan-gu experienced a 49% drop, with Seocho-gu showing the largest decline at 73%.

The Ministry stated, "Through this renewed designation of foreign-invested land transaction permit zones, we will prevent speculative real estate investment by foreigners in the Seoul metropolitan area. We will closely monitor these areas and respond strictly to any suspicious illegal activities, such as unusual transactions or speculative behavior, in cooperation with relevant agencies."

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Through this renewed designation of foreign-invested land transaction permit zones, we will prevent speculative real estate investment by foreigners in the Seoul metropolitan area. We will closely monitor these areas and respond strictly to any suspicious illegal activities, such as unusual transactions or speculative behavior, in cooperation with relevant agencies.