South Korea probes 840 foreign real estate

South Korea's Ministry of Land, Infrastructure and Transport is investigating 840 residential and commercial property transactions conducted by foreign nationals. The probe covers deals made between June 2025 and July 2026 and is scheduled to conclude in December.

This expanded national inquiry builds on regulatory measures first introduced in 2022. Officials aim to close systemic loopholes that have allowed unverified foreign capital to bypass domestic lending limits and tax oversight. The move responds to public concerns over fairness in the housing market.

Scrutiny of Funds and Visa Compliance

Inspectors are now scrutinizing a broader dataset under a revised decree of the Real Estate Transactions Act. They are verifying whether purchase funds originated from foreign stock sales, cryptocurrency liquidations, or overseas loans. Authorities are also cross-referencing visa categories to identify unauthorized rental businesses operated by short-term visitors.

Domestic residents face stringent mortgage caps, debt-to-income ratios, and strict tax compliance checks. These are designed to cool overinflated urban housing prices. Offshore buyers, however, have occasionally used unregulated foreign capital transfers to purchase high-value properties. Some have built multiple-home portfolios without facing equivalent regulatory hurdles.

Enforcement of Owner-Occupancy Rules

To prevent local property speculation and address chronic housing supply shortages, the ministry is partnering with local governments. They are verifying whether purchasers in designated land transaction permit zones are adhering to mandatory owner-occupancy rules. In Seoul's densely populated market, ensuring purchases reflect actual residence rather than passive investment is critical.

Local district offices hold significant enforcement power. If a buyer fails to reside in a property as declared, officials can issue compliance orders, levy financial penalties, or revoke purchase permits altogether. This oversight mechanism reviewed 605 irregular transactions last year.

A Global Trend in Market Regulation

The Korean initiative reflects broader global efforts. Metropolitan centers like Vancouver, Sydney, and London have also moved to safeguard local housing affordability. The common goal is to ensure foreign capital complies with domestic financial law.

"Our goal is not to discourage foreign investment, but to ensure that real estate transactions operate on a transparent and level playing field," said Shin Yun-keun, director general for land policy at the ministry. He stated that thorough investigations into irregular capital sources and unverified property uses establish a clear standard of compliance to protect market integrity.

The ministry's actions are a direct attempt to curb market manipulation and enforce fair rules for all home buyers in a competitive market.