Apartment buildings in the Gangnam ward in southern Seoul. (image: Yonhap)
SEOUL, Oct. 29 (Korea Bizwire) — Concerns are being raised as Chinese millionaires are reportedly purchasing additional luxury apartments in Seoul, further raising housing prices amid a lack of housing supply.
Recently, a Chinese study-abroad student in his 30s was found to have purchased eight apartments across South Korea, seven of which were being rented out.
The individual’s rental income was not being properly reported to authorities.
Every year, a growing number of foreigners are purchasing apartments in South Korea. The National Tax Service reported that 23,219 foreigners purchased 23,167 apartments across the country between 2017 and May 2020.
Among them, Chinese (13,573 apartments) and Americans (4,282 apartments) purchased the most apartments.
Among foreign homeowners, 32.7 percent had never lived in the real estate unit or units that they had purchased. In August, an American in his 40s shocked the country by purchasing 42 small apartments.
While purchasing homes for residential purposes is acceptable, experts are concerned over possible speculation in real estate that may cause the market to overheat.
“The government restricts borrowing to discourage speculation in real estate,” said Prof. Kwon Dae-jung from Myongji University.
“The problem here, however, is that foreigners are exempt from these restrictions. They borrow from a foreign bank to purchase real estate in South Korea.”
Imposing discriminatory taxation on foreigners in accordance with ownership over domestic real estate, however, requires a careful approach, since it is connected to matters of international relations, experts say.
M. H. Lee (mhlee@koreabizwire.com)
