The Number of 'Foreign Landlords' More Than Doubled in One Year

Foreign Landlords Increased Significantly Last Year
Chinese Nationals Lead in Ownership Transfer Registrations (Sales)

The volume of building transactions by foreigners reached a record high last year, and the number of foreign landlords also surged significantly.

According to the Court Registry Information Plaza on the 8th, the number of foreign landlords who received confirmed dates last year was 4,577, an increase of 161% (1,750 people) compared to the previous year. This number had been gradually increasing from 864 in 2017, 1,118 in 2018, and 1,415 in 2019, before sharply rising last year. In contrast, the number of domestic landlords increased by only 1.4%, from 2,142,222 to 2,172,369, amid a transaction freeze.

Along with the real estate price surge in recent years, foreign building sales also increased significantly. Last year, the volume of building transactions by foreigners (according to the Korea Real Estate Board) was 21,033 cases, maintaining over 20,000 cases for two consecutive years. Foreigners, who are relatively free from various regulatory hurdles such as loans, have engaged in aggressive real estate investment.

In August last year, the National Tax Service revealed a case of a 40-year-old American who purchased 42 apartments through gap investment (transaction amount of 6.7 billion KRW). Among buyers who applied for ownership transfer registration due to sales last year, the nationality with the highest number was China (9,787 people), followed by the United States with 1,598 people.

As the number of foreign landlords increases, caution is required as related deposit guarantee incidents may occur. Complaints about not being able to contact the landlord when the lease expires and the tenant tries to terminate the contract and receive the deposit are common topics in real estate communities. If conflicts arise over the return of the deposit, even if legal procedures are initiated, it is problematic that it is not easy to get the deposit back quickly.

The head of A Real Estate Agency in Gongdeok-dong, Mapo-gu said, "If the landlord is a foreign national, it is best to establish contact at least six months in advance," and added, "When signing a lease contract, it is better to contract monthly rent rather than jeonse (lump-sum deposit lease), which has more complicated loan procedures."

Meanwhile, discussions on regulating foreigners' real estate acquisitions continue in the political arena.

Ahn Cheol-soo, the presidential candidate of the People’s Party, pledged on the 21st of last month to introduce a 'foreign speculation tax' to eliminate reverse discrimination against domestic residents in real estate. He proposed imposing a 15% speculation tax on the acquisition price if foreigners acquire real estate but do not reside there, and to impose a property tax surcharge of 4% annually, equivalent to the rate for luxury villas.

He pointed out, "Foreigners easily purchase real estate by raising funds through foreign banks that are not subject to our government’s loan regulations such as Loan-to-Value (LTV) and Debt Service Ratio (DSR)." He added, "Given that our citizens are suffering from the triple hardships of soaring real estate prices, loan regulations, and interest rate hikes, we can no longer delay strengthening regulations on foreigners’ real estate acquisitions to resolve reverse discrimination and improve fairness."

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