Foreigners Own Land 16.4 Times Lager Than Youido

This year, foreigners have shown less zeal for purchasing real estate in Korea. This phenomenon seems to be most affected by the rising price of the real estate.

According to the report released by Ministry of Construction and Transportation, as of the end of June, foreigners (including Korean nationals having citizenship of other countries) own 18,751 pieces of land amounting to 139,290,000m2, 16.4 times the size of Youido (8,5 million m2 based on the administrative zoning). In terms of money, it stands to 18,3 trillion won (circa $1.5 billion). The area retained by foreigners has increased by 3.4 million m2 (2.5%) in comparison of last year’s 135,890,000 m2. But the increasing trend is much slower this year.

The size of land owned by foreigners has marked a steep upward trend upon opening of the estate market in June of 1998. For example, in 1997, the area was 37.96 million m2; by the turn of 1998, 50.91 million m2 (34.1% increase in comparison with the figure for the previous year tallied at the same time); in 1999, 82.3 million m2 (61.7%); in 2000, 113.07 million m2 (37.4%); and in 2001, 135.89 million m2 (20.2%). In total, the size had increased more than 20% every year.

The reason behind foreigners less enthusiasm for the real estate purchasing this year is due to the increasing price since the middle of last year. In the past, foreign citizens and corporations had eagerly purchased land while the price was lowered undergoing the economic crisis.

Geographically, foreigners favor the Kyunggi area most (29.53 million m2, or 21.2%), followed by Chunnam (28 million m2, 20.1%), Kangwon (13.11 million m2, 9.4%), Kyungbook (11.87 million m2, 8.5%) and Choonam (10.78 million m2, 7.7%).

Jae-Seong Hwang jsonhng@donga.com