Soaring Seoul Apartments... Even Bitcoin Chinese Hawala Traders Coveted Them

Apartment Purchases Detected Through Hwancheegi and Customs Portals
Foreigners' Domestic Building Transactions Hit Record High Last Year

Yeouido Apartment Complex as Seen from the 63 Art Observatory in Seoul

As it has been revealed that even foreigners who raised money through illegal methods such as Bitcoin money laundering have massively purchased apartments in Seoul, attention is focusing on the status of foreign investment in domestic real estate.

According to the Korea Real Estate Board on the 28th, in the first quarter of this year, foreign transactions of buildings (including single-family houses, multi-family houses, apartments, and commercial officetels) in Korea amounted to 5,280 cases, an increase of about 6% compared to 4,979 cases in the same period last year. The 5,280 cases represent the largest quarterly volume since the Real Estate Board began compiling related statistics in January 2006. Looking at monthly figures, the transaction volume in March recorded 2,141 cases, the second highest ever after 2,273 cases in July last year.

Foreign transactions include cases where either the buyer or seller is a foreigner. Foreigners’ building transactions have continued to increase after surpassing 10,000 cases in 2014, with △14,570 cases in 2015 △15,879 cases in 2016 △18,497 cases in 2017 △19,948 cases in 2018. In 2019, the number decreased by 11.0% to 17,763 cases compared to the previous year, but surged by 18.5% to 21,048 cases last year, exceeding 20,000 cases for the first time.

As foreign purchases of domestic buildings have increased like this, cases of purchases using illegal funds have also been detected by customs authorities. Methods included not only money laundering using the cryptocurrency Bitcoin but also evasion of customs declarations and other tactics.

According to the Korea Customs Service, a Chinese national A deposited 2.68 million yuan into an account designated by a money laundering organization in China, and the organization purchased cryptocurrencies such as Bitcoin in China and transferred them to the electronic wallet of an organization member in Korea. The money laundering organization sold these cryptocurrencies at a domestic exchange and remitted 450 million won in Korean currency to A.

At that time, the so-called "Kimchi Premium," where domestic exchange prices were higher than foreign ones, was at its peak. Using these illegally brought-in funds, A purchased an apartment worth 1.1 billion won in Seoul in 2018.

Chinese national B, who operated an online shopping mall in Korea, imported clothing and miscellaneous goods worth 1.1 billion won from China but declared only 400 million won to customs. The 350 million won created through tax evasion was used for gap investment in domestic apartments.

The Seoul Regional Customs Office of the Korea Customs Service recently investigated about 500 foreigners who purchased apartments in Seoul over the past three years whose sources of funds were unclear and detected 61 people who illegally procured funds.

The detected types include ▲17 people (16 apartments, 17.6 billion won) who purchased apartments with criminal funds such as money laundering or customs evasion, and ▲44 people (39 apartments, 66.4 billion won) who acquired apartments without reporting the acquisition to foreign exchange authorities.

The apartment purchase areas were led by Gangnam-gu with 13 cases (31.5 billion won), followed by Yeongdeungpo-gu with 6 cases (4.6 billion won), Guro-gu with 5 cases (3.2 billion won), Seocho-gu with 5 cases (10.2 billion won), Songpa-gu with 4 cases (5.7 billion won), and Mapo-gu with 4 cases (4.9 billion won). The nationalities of the detected foreigners were 34 Chinese, 19 Americans, 2 Australians, and 6 others.

Meanwhile, the average apartment sale price in Seoul has exceeded 1.1 billion won after rising by more than 100 million won in seven months. According to the monthly KB Housing Market Trend time series data released by KB Kookmin Bank’s Liv Real Estate, the average apartment sale price in Seoul in April was 1,111.23 million won, up 11.3 million won from last month’s 1,099.93 million won, surpassing 1.1 billion won. This is the highest price since KB Kookmin Bank began releasing the statistics in December 2008.

This content was produced with the assistance of AI translation services.