Investing in Real Estate in South Korea as an Expat

Published on January 17, 2026 and written by Cyril Jarnias

Entering South Korea’s Real Estate Market is increasingly fascinating to expatriates. The country combines a robust economy, stable political environment, highly liquid markets in major cities, and a relatively transparent legal framework for foreigners. But behind this appealing image, reality is more nuanced: very high prices in Seoul, dense taxation, specific rules for non-residents, atypical rental systems like jeonse, and, recently, targeted restrictions on foreign purchases in the capital region.

An attractive, yet highly polarized market

South Korea has approximately 51.7 million inhabitants, with 92% in urban areas, and a GDP close to $1.8 trillion. The economy is diversified (semiconductors, automobiles, electronics, shipbuilding, culture and entertainment) and the country benefits from an AA rating with a stable outlook from S&P. In this context, real estate remains a pillar of household wealth: more than 75% of their assets consist of real property, primarily housing.

However, market dynamics are not uniform. Recent data shows a two-speed South Korea.

Prices: Seoul vs. the rest of the country

In February 2025, the national housing price index barely increased by 0.31% year-on-year. Adjusted for inflation (2.3%), this even equates to a real decline of approximately 1.67%. At the same time, the Seoul market behaves like a separate planet: the capital showed an annual increase of 3.63%, and the metropolitan region (Seoul, Incheon, Gyeonggi) about 1.68%. Outside this urban cluster, prices have been declining for three years.

Price per square meter figures illustrate this gap.

Comparison of average prices per m² (February 2025)

City / Region	Average price per m² (KRW)	Average price per m² (USD, approx.)
Seoul	13,396,000	9,272
National average	5,763,000	3,989
Capital region (overall)	8,531,000	5,905
Incheon	5,644,000	3,906
Gyeonggi	6,554,000	4,536
Busan	6,690,000	4,630
Daegu	6,713,000	4,646
Other regional cities	4,605,000	3,187

Furthermore, the OECD considers South Korea to have the largest housing price gap between large and small cities among its members. For an expatriate, this means exposure to the risk of a correction varies greatly depending on whether you buy in central Seoul, in a dynamic port city like Busan, or in a medium-sized city with a declining population.

Cycle, transactions, and construction

After a surge fueled by low interest rates and accommodative policies in 2020-2021 (nearly 10% nominal increase in 2021), prices corrected significantly in 2022 and 2023 before stabilizing. The Korea Housing Market Institute estimates the low point was likely reached in early 2023 and anticipates a phase of gradual recovery, but with an average national decline still expected around -0.5% in 2025, masking Seoul’s resilience (+1.7% projected) and the decline outside the capital (-1.4%).

On the supply side, the situation is tighter. In 2024, 449,835 housing units were completed (+3.16%) and 305,331 construction starts were launched (+26.07%), mainly through public programs. But these figures remain insufficient to cover an estimated demand of around 450,000 units per year. The Housing Market Institute even anticipates a decline of approximately 30% in residential activity in 2025 compared to historical averages, increasing the risk of targeted shortages, especially in the capital region.

Macroeconomic context and interest rates

The Bank of Korea lowered its base rate to 2.75%, after cumulative cuts of 75 basis points. Analysts still consider further easing to 2.25% if growth, expected around 1.5%, remains sluggish. The weighted average rate for new mortgage loans, however, stands at nearly 4.23%, which weighs on households’ borrowing capacity, especially as debt service ratio (DSR) regulations have been tightened.

Foreigners’ property rights: A generally open framework, but stricter around Seoul

One of South Korea’s major advantages, compared to several Asian countries, is that it allows foreigners to buy almost all types of properties, including land. The property rights of non-nationals are generally similar to those of citizens: the possibility to sell, rent, develop, transfer, subject to compliance with local law.

There is no minimum investment threshold simply to acquire a property, nor a residence requirement. However, residency is not automatically granted upon purchase; it depends on separate visa procedures.

The basic legal framework

Several laws combine to regulate foreign acquisitions:

– the Foreigner’s Land Acquisition Act (FLAA), which defines the conditions for foreigners to purchase land;

– the Act on Report on Real Estate Transactions, which requires reporting the acquisition to local authorities, typically within 60 days after signing the contract;

– the Registration of Real Estate Act, which governs land registration publicity;

– the Foreign Exchange Transactions Act (FETA) and its regulations, which regulate cross-border fund transfers for real estate.

Restricted areas and reporting obligations

Certain categories of land require prior authorization: military site protection perimeters, heritage protection zones, natural or ecological reserves, some agricultural land (for which a farmland acquisition certificate is only issued for actual farming). For standard residential apartments outside sensitive areas, purchase is in principle based on simple reporting.

However, all foreign buyers must report the transaction to the competent city hall or gu-office within 60 days of the contract. Non-residents must also fulfill specific obligations under the Foreign Exchange Transactions Act when transferring funds from abroad.

Targeted tightening in the capital region

A major development for expatriates concerns the new permit-like rules for foreign purchases in Greater Seoul, which came into effect in the summer of 2025. These “Foreign Land Transaction Permit Zones” cover:

– all of Seoul (25 districts);

– 23 cities and counties in Gyeonggi province;

– 7 districts of Incheon.

All residential housing units are concerned (apartments, villas, townhouses, multi-family housing, from 6 m²). Officetels, however, are excluded. To buy in these zones, a foreigner must now:

– obtain a permit from the local authority before signing the preliminary contract;

– attach this permit to the official contract;

– commit to move in within four months of purchase and occupy the property for at least two consecutive years.

Therefore, purely rental investment (without occupancy) has little chance of being authorized in these zones during the measure’s duration. Compliance with occupancy obligations is monitored via electricity, water, gas consumption, and inspection visits. In case of non-compliance, the buyer risks fines of up to 10% of the property’s value and, in extreme cases, contract nullification.

For the expatriate considering buying an apartment in Gangnam to rent it out entirely, this tightening changes the game. It becomes crucial to distinguish between permit zones, free zones, and excluded assets (officetels, commercial uses).

Where to invest? Mapping of main cities and regions

South Korea offers a range of very different markets, both in terms of prices and yields and risk profiles. The majority of foreign investments are concentrated in the capital region (about 69% of properties owned by non-nationals), but other cities and emerging areas are attracting increasing attention.

Seoul: Financial, technological heart and prime market

The capital remains the top choice for many expatriates, as it combines:

– strong rental demand, especially around universities, tech hubs, and business districts;

– chronic land scarcity, which supports long-term value;

– ultra-dense transport infrastructure (subway, developing GTX express lines, high-speed rail stations);

– increasing demand for smart buildings and sustainable buildings.

Prices are logically the highest in the country. According to various compiled sources, we find:

– a general range often cited between 10 and 25 million KRW/m² for apartments in Seoul, with prime neighborhoods like Gangnam reaching 40 to 70 million KRW/m² for ultra-luxury;

– an observed average price of 13.396 million KRW/m² (February 2025).

For an expatriate, Seoul therefore offers a typical profile of a wealth growth market, more than an immediate cash-flow market.

Busan: Major port city and tourist destination

Second largest city in the country, Busan is a major port, a beach destination (Haeundae, Gwangalli), and a university city. The market is more accessible than Seoul, while remaining liquid. Price per m² ranges, according to sources, from 6 to 12 million KRW for standard neighborhoods, up to 15-25 million KRW in premium areas.

Rental yields are generally more attractive, with expectations around 4 to 6% for long-term rentals and 6 to 8% for short-term rentals in tourist sectors. Data on platforms like Airbnb shows, for example, an average daily rate around 90,000 to 100,000 KRW, an occupancy rate of about 60%, and over 200 nights rented per year for a typical listing.

Incheon and the Seoul crown: Logistics hubs and new towns

Incheon, with its international airport and special economic zones, attracts logistics investors, international companies, and residents looking for more affordable alternatives to Seoul. Neighborhoods like Songdo International Business District or Cheongna International City combine new buildings, offices, serviced residences, and tax advantages.

Price per m² generally ranges from 5 to 10 million KRW, up to 13-20 million KRW in premium neighborhoods like Songdo. Expected rental yields are around 4 to 5.5% for long-term rentals, slightly more for short-term.

Daegu, Daejeon, Gwangju, Ulsan: Major regional cities

These regional metropolises offer prices significantly lower than Seoul, generally between 4 and 8 million KRW/m² for Daegu, for example, with gross yields often advertised between 4.5 and 6% for apartments.

However, they suffer more from the current stagnation and sometimes less favorable demographic trends. For an expatriate without a professional reason to live there, these markets are more about yield diversification than primary residence.

Jeju Island: Vacation villas and tourist residences

Jeju is the quintessential “pleasure + yield” card. The island attracts Korean and foreign tourists, with a market geared towards second homes, vacation houses, and luxury complexes. Prices per m² typically range between 7 and 15 million KRW, with long-term rental yields of 5 to 7%, and up to 7-10% for well-managed seasonal rentals.

Moreover, Jeju offers a specific visa program linked to real estate investment: an F-2 visa valid for two years, renewable, for a purchase of at least 500 million KRW in designated projects. For an expatriate seeking a tourist base with an immigration dimension, this is a tool to include in the consideration.

Property types and specific rental structures

Foreigners can in principle buy condominium apartments, single-family houses, villas (small low-rise buildings), land plots, and commercial buildings. But the structure of the Korean housing stock, especially in Seoul, is dominated by large apartment complexes and officetels (hybrid office/housing units).

Two cultural elements heavily influence a home’s value: south-facing orientation (sought for sunlight) and floor level (middle floors are often most coveted). These almost codified criteria can significantly vary the price for equivalent surface area.

The jeonse system and its evolution

It’s impossible to discuss real estate in South Korea without mentioning jeonse, this rental system with a massive single deposit. The principle is simple in appearance: instead of paying monthly rent, the tenant provides a huge deposit (often 50 to 80% of the property’s value), pays no rent for two years, and gets the full deposit back at the end of the contract. The landlord uses this capital as a kind of zero-interest loan that they reinvest (real estate, financial markets, debt repayment, etc.).

But it carries considerable risks for tenants: if the landlord is over-indebted, the building is seized or auctioned, the deposit may not be fully recovered. High-profile fraud scandals and over-leverage have erupted in recent years, affecting tens of thousands of tenants and involving trillions of won in deposits.

Authorities have responded: strengthened protections via the Housing Lease Protection Act, implementation of deposit insurance systems (HUG, Seoul Guarantee Insurance), capping deposit increases at 5% upon renewal in some cases, explicit encouragement to switch to monthly rent systems (wolse).

Result: the share of jeonse contracts in new leases is declining significantly. In 2022, for the first time, monthly rentals exceeded jeonse. In some segments, over 60% of new leases are now wolse.

Wolse and banjeonse: Schemes more familiar to expatriates

Wolse is halfway between the “classic” Western model and jeonse: the tenant pays a deposit (often between 10 million and 50 million KRW for an officetel or ordinary villa) and pays monthly rent. The relationship between the two is usually negotiable: the higher the deposit, the lower the rent, and vice versa. Listings are often presented in the “deposit / monthly rent” format (e.g., “50/100” for a 50 million KRW deposit and 1 million KRW per month).

In practice, most expatriates will turn to: relocation services, social networks, online forums, and specialized agencies to obtain information and support tailored to their needs.

For an expatriate investor-landlord, the rise of wolse represents a significant change: monthly rental cash flows become more predictable and now also interest foreign institutional investors, who are setting up dedicated residential rental vehicles.

Rental levels and yields

Rents obviously vary by neighborhood. In Seoul, indicative ranges for apartments are as follows:

– average national jeonse deposits around 231.8 million KRW, but 444.8 million KRW in Seoul;

– average monthly rents (wolse) about 1.122 million KRW in Seoul, 946,000 KRW in Gyeonggi, 807,000 KRW in Incheon;

– in Gangnam, a 2-bedroom often rents for 2.5 to 3 million KRW per month;

– in Mapo (Hongdae area), small units rent for 1 to 1.5 million KRW monthly.

Expected gross yields typically vary:

– 3.5 to 5% for “standard” apartments in Seoul;

– 2 to 4% for more general properties in Greater Seoul;

– 1.5 to 2.5% for ultra-prime properties (Gangnam, luxury complexes);

– 4 to 6% for apartments in regional cities (Busan, Daegu, etc.);

– 3.5 to 5.5% for well-located officetels;

– 5 to 7% for vacation residences in Jeju, or even more for short-term.

After accounting for fees, taxes, management, maintenance, net yields logically drop (around 2-3% net in Seoul according to available estimates).

Financing, taxation, and acquisition costs for an expatriate

South Korea allows foreigners to use local real estate credit, but conditions are generally stricter than for permanent residents. In parallel, the tax system is comprehensive, with multiple layers of taxes on purchase, ownership, and resale.

Foreigners’ access to credit

Major banks (KB Kookmin, Shinhan, KEB Hana, Woori, Industrial Bank of Korea) offer mortgage products to foreigners, and the Korea Housing Finance Corporation (KHFC) has specific products. However, typical conditions are:

– higher down payment: non-residents often must provide 30 to 50% of the property’s value as equity;

– limited LTV: loan-to-value ratio often capped at 40-70% for foreigners, sometimes less in areas deemed speculative;

– proof of income: pay stubs, tax returns, bank statements, employment contracts, understanding if income comes from abroad;

– local banking history: possession of a Korean account with a transaction history.

Rates vary according to the type:

– usual fixed rates between 3.5 and 5%;

– variable rates around 5.3 to 5.8%;

– maturities can range from 10 to 40 years.

Early repayment penalties exist (formulas proportional to the amount repaid and remaining time) and late payment fees can go up to 11% per year in case of payment default.

Acquisition costs: A significant bill

The total cost of a real estate acquisition in South Korea is not limited to the listed price. For a foreign buyer, one must add:

Synthetic estimates indicate total purchase costs for the buyer between 1.9 and 13.6% of the property’s value, plus 0.3 to 0.5% for the seller (mainly commission). In total, the round-trip cost (purchase + resale) can thus represent between 2.2 and 14.1% of the property’s price.

Recurring and resale taxation

During ownership, the owner pays several taxes:

– annual Property Tax: 0.15 to 0.5% of the taxable value for most homes, with rates potentially reaching 4% for some types (villas, hotels);

– Comprehensive Real Estate Holding Tax (CRET): progressive additional tax (0.5 to 5%) if the cumulative value of owned properties exceeds certain thresholds (typically 600M KRW for housing, 1.2B for a single owner, 500M for some land), plus a rural development surtax of 20% of the CRET amount;

– Local Education Tax: 20% of the property tax amount.

Tax residents are taxed on their rental income as part of the comprehensive income tax, according to a progressive scale from 6 to 45%, plus a 10% local surtax. Non-residents, however, are only taxed in Korea on their Korean-sourced income.

For rental income, two calculation methods coexist:

Regarding real estate capital gains, the regime is particularly harsh for speculative transactions. Gains are taxed separately, based on:

– sales price – (acquisition cost + necessary expenses + possible improvement expenses);

– minus a standard deduction of 2.5 million KRW per year of ownership;

– minus an additional deduction for long-term ownership (from 10% of the net gain for 3-4 years of ownership to 30% beyond 10 years).

Residents are subject to the progressive scale (6-45%) on the capital gain for properties held at least two years, but punitive rates apply to very short holdings (up to 60-70%) for a property resold before two years, depending on the case. For non-residents and foreign companies without a permanent establishment in Korea, the rule is as follows:

– tax equal to the lower of 11% of the gross sales price (including local surtax) or 22% of the net capital gain.

A withholding at source mechanism may then apply: if the buyer is a Korean company, it must withhold the tax and remit it to the tax authorities, with the foreign seller still required to file a return for adjustment.

Residency by investment: F-2 and F-5 visas linked to real estate

For an expatriate considering settling long-term, the immigration dimension is often as important as the financial return. South Korea does not automatically grant a residence visa to real estate buyers, but some schemes link investment and right to stay.

F-2 visa (long-term residence) linked to real estate

An F-2 visa scheme allows obtaining long-term residence under certain real estate investment conditions, usually in urban projects designated by the government. Required amounts are significant (on the order of several hundred thousand dollars, sometimes around 1.5 billion KRW for some real estate investment programs giving access to F-2-10).

The principle:

This type of visa can serve as a stepping stone to permanent residence F-5, or even naturalization, subject to additional requirements regarding length of stay, language proficiency, and cultural integration.

Jeju’s special program

Jeju offers a scheme more quantitatively accessible for property purchases in certain areas: a specific F-2 visa linked to a real estate investment of at least 500 million KRW on the island, valid for two years and renewable, in principle conditioned on maintaining the investment.

For an expatriate considering combining quality of life, tourist investment, and residency prospects, this type of scheme can be particularly attractive, provided they accept concentrating the investment in a given geographical area.

Specific risks and pitfalls to avoid

Investing in South Korean real estate as an expatriate is not just about filling out a few forms. Several structural risks must be taken seriously.

High costs and heavy taxation

Transaction costs and taxation on capital gains are among the highest in the world, particularly for short holdings and situations of multiple property ownership in so-called speculative zones. For an investor looking for a quick turnaround, the risk of seeing the net gain wiped out by taxes is major. Projects must therefore be planned with a sufficiently long holding horizon.

Risks related to jeonse and debt structure

Even if expatriates rarely use jeonse themselves as tenants, this system weighs on the overall market equilibrium and can affect the liquidity of some segments. Fraud scandals have shown that heavily indebted buildings could plunge their tenants into dramatic situations.

Aging population and regional disparities

South Korea is heading towards a “super-aged” society, with accelerated aging and one of the lowest birth rates in the world. In the long term, this could weigh on housing demand in many regional cities with declining populations, making resale more difficult and limiting price appreciation.

Regulatory complexity and language barriers

The legal and administrative system is dense: multiple reports, strict deadlines (60 days for registration and acquisition reporting), permit rules in some zones, multi-level taxation, etc. Most documentation is in Korean, and negotiation practices rely heavily on implicit cultural codes, where personal relationships and respect for hierarchies play a big role.

For an expatriate not fluent in the language, support from a local lawyer and a real estate agent experienced in working with foreigners is not a luxury but a near-necessity.

Possible strategies for an expatriate investor

From this landscape, several typical investment profiles emerge for an expatriate.

A Seoul-based expatriate, working in tech or finance, might consider:

– purchasing an apartment in an emerging neighborhood (Mapo, Seongsu-dong, certain parts of Yongsan) to live in, betting on steady appreciation linked to infrastructure;

– or purchasing a small officetel, possibly outside permit zones, to rent to students or young professionals, with professional management.

An expatriate focused on rental yield might turn to:

An investor seeking international diversification and a potential visa might favor:

– an eligible investment project for an F-2 visa in a designated urban development;

– a property on Jeju in an area eligible for the island F-2 program, combining personal use and seasonal rental.

In all cases, three precautions are essential:

– properly integrate the impact of taxation and costs into the business plan;

– avoid areas with negative demographic dynamics if the holding horizon is long;

– anticipate regulatory changes, especially around restrictions on foreign purchases, which may be extended or expanded.

In conclusion

South Korean real estate offers expatriates an investment field rich in opportunities, but also in pitfalls. The country’s economic strength, Seoul’s vitality, sustained rental demand, and the relative openness of the legal framework favor a well-prepared project. Conversely, extreme price polarization, heavy taxation, new rules targeting foreign buyers in the capital region, and risks linked to certain local mechanisms (jeonse, declining regional markets) require a methodical approach.

It is at this price – figuratively and literally – that real estate investment in South Korea can become, for an expatriate, a genuine lever for wealth stabilization and a long-term life project.