Published on and written by Cyril Jarnias
The massive return of travelers to South Korea is no longer measured solely by full flights or lines in front of royal palaces. It is now visible in the price per square meter in Seoul, the yields of branded residences in Jeju or Gangwon-do, the proliferation of Airbnbs in Busan, and even in political debates about regulating short-term rentals. Tourism and real estate have become intimately linked, to the point where every shock to one impacts the other.
The article analyzes the impact of tourism dynamics on the South Korean real estate market, examining its varying effects across neighborhoods and market segments. It notably incorporates emblematic examples from Jeju Island and the port city of Busan, as well as the emergence of the new wave of “branded” residences, which combine a prestigious brand name with a real estate project.
A tourism sector in full rebound, heavily impacting the economy
Before delving into real estate details, it’s essential to measure the scale of the tourism phenomenon. In 2019, travel and tourism already represented 4.2% of South Korea’s GDP and 4.8% of total employment. After the COVID-19 hiatus, the recovery is spectacular.
In 2024, the country welcomed 16.37 million foreign visitors, reaching 94% of the pre-pandemic peak, a 48% increase compared to 2023. The primary markets remain China, Japan, Taiwan, and the United States, although China’s share has declined since 2016, while markets like the U.S., Taiwan, or Singapore now outperform their 2019 levels.
The South Korean tourism industry generated 24.4 trillion won in revenue in 2023, approximately 90.9% of the pre-pandemic level.
Forecasts are clearly upward: the Korean tourism market is estimated at $41.8 billion in 2025, with expected growth reaching $91 billion by 2035 (a CAGR of 8.1%). The bulk of this demand is domestic, with an expected share of 66.5% in 2025, but the political goal remains to attract 30 million foreign tourists by 2027.
This growth has a mechanical effect on real estate: increased demand for accommodation, proliferation of players (hotels, seasonal rentals, branded residences), rising rents in tourist neighborhoods, and an influx of capital, particularly foreign.
The mechanism: How tourism drives up real estate prices
Economists describe a relatively clear transmission channel between tourism and real estate. An increase in tourist demand leads to higher consumption of travel-related goods and, especially, accommodation services. This additional demand in the rental market pushes rents upward. Higher rents, in turn, attract investors and entrepreneurs who buy homes to rent them out (often short-term), which drives up acquisition prices and reduces the supply available for residents.
The effects can be direct, through direct competition between tourists and residents for the same housing (studios, small apartments, central neighborhoods), or indirect, via the valuation of tourist amenities (landscapes, heritage, accessibility) that become “capitalized” into real estate prices.
In highly tourism-dependent economies like Iceland, fluctuations in tourist demand significantly influence housing prices. Studies indicate that the growth of the Airbnb platform contributed to an approximately 2% annual increase in real prices over three years, representing nearly 15% of the total increase during that period.
South Korea is not Iceland, but the mechanism is similar in highly touristic areas: inner Seoul, coastal Busan, Jeju, mountainous regions like Gangwon-do, or certain historic hanok neighborhoods. As arrivals increase again, the question is no longer whether tourism influences real estate, but to what extent and in which locations tensions become problematic for residents.
Seoul: When Airbnb nights are reflected in the square meter price
The capital concentrates both the majority of international tourist flows and the most strained part of the real estate market. According to available data, South Korea had about 113,969 active Airbnb listings at one point, of which barely 5% mentioned a license number. By late 2024, approximately 72,400 active listings were recorded nationwide, nearly half of which were apartments or officetels – even though the latter are in principle classified as commercial buildings and are not supposed to be legally used for tourist short-term rentals.
In Seoul, in April 2023, 13,945 Airbnb listings were active, with extreme concentration in a few districts: over 8,000 listings in Mapo-gu, Gangnam-gu, Yongsan-gu, Jung-gu, and Jongno-gu alone. Mapo-gu alone exceeded 2,900 listings, and the Seogyo-dong neighborhood peaked at 628 accommodations.
In certain tourist hotspots of Seoul, a typical listing would be booked an average of 296 nights per year, with a median occupancy rate of about 81%. In other words, for a significant portion of the housing stock, the primary purpose is no longer permanent residence but tourism.
Measured effects on prices and rents
Academic research on Seoul highlights this link. By cross-referencing the evolution of sale prices, rents, and the number of Airbnb listings by legal neighborhood (dong), researchers observe:
The Airbnb effect on Seoul’s real estate market varies by property type and neighborhood. For apartments, effects are marked in Mapo-gu and Gangnam-gu, with an elasticity exceeding 1 in Hannam-dong. For officetels, the impact is visible in high-density areas like Seocho-dong, Bangbae-dong, Jamsil-dong, Guro-dong, or Bongcheon-dong. For multi-family houses, tensions are clear in Mapo-gu, Yongsan-gu, and Gangnam-gu, particularly in neighborhoods like Mangwon-dong, Hapjeong-dong, or Itaewon-dong. Regarding rents, the effect is noticeable for apartments in certain sectors of Mapo-gu, with elasticity exceeding 1 in Hoehyeon-dong 1-ga. For officetel rents, increases are concentrated in the “golden triangle” of Gangnam–Seocho–Songpa. For multi-family house rents, the strongest signals appear in Mapo-gu, for example in Sangsu-dong, where elasticity exceeds 1.
Eleven legal neighborhoods stand out as particularly sensitive, showing significant effects in four or more analytical categories: Sangsu-dong, Samseong-dong, Guro-dong, Bangbae-dong, Seocho-dong, Cheongdam-dong, Yangjae-dong, Dapsimni-dong, Hwayang-dong, Munjeong-dong, and Seongsan-dong.
At the micro-territory level, the rise of tourist rentals amplifies tensions on already pressured real estate markets. In Seoul, the average apartment sale price reaches 13.396 million won per square meter, more than 2.3 times the national average. In flagship districts like Gangnam-gu, estimates even approach 25 million won/m².
A rental market under pressure
The rental market shows equally evident tension. The integrated rent index rose by about 1.20% year-on-year in March 2025, with more marked increases in Incheon (3.8%), Seoul (2.7%), and Gyeonggi (2.1%). Apartments showed a year-on-year rent increase of 1.65%, in a context where, as early as 2019, 42% of Korean households were tenants.
The jeonse system (large deposit with no monthly rent) and wolse (rent with deposit) strongly structure this market: about 30% of households use jeonse, 14% wolse, the rest being owner-occupiers. These contracts typically last two years, but tourism pressure can make them harder to renew for low-income households in tourist areas.
Airbnb, regulation, and a shifting model
The contrast between the law and reality is spectacular: by late 2024, of the approximately 72,400 listings recorded nationwide, only 7,200 were officially registered, meaning nearly 80% were “illegal” or at best in a gray area. Studios and officetels are highly sought after by travelers as they are cheaper than hotels, equipped (kitchen, washing machine), and close to lively neighborhoods, but the law considers them commercial assets, not housing intended for short-term residential rentals.
The South Korean government is strengthening the legal framework for tourist rentals starting late 2024, with key deadlines for owners and platforms.
Starting late 2024, any new Airbnb listing must display a lodging business license number to be published.
Listings already online have until the end of 2025 to comply and add their license number, under penalty of removal from the platform.
Starting October 2025, the majority of studios and officetels (office-tels) can no longer be offered for rent on Airbnb.
From October 2025, bookings will be automatically blocked for any accommodation not officially registered as a business.
These hosts must now register as “urban guesthouses” under the Tourism Promotion Act, comply with the Building Act, pay VAT and income tax, and have proper business registration.
For investors who had positioned themselves in “Airbnb-friendly” officetels, the game changes radically: they either shift to the traditional rental market or bypass platforms through direct bookings (private websites, social networks, platforms specializing in monthly stays), at the risk of remaining in a legal gray zone. For the most exposed neighborhoods, some pressure on rents could ease in the medium term, similar to Los Angeles where studies showed a drop in rents after tightening regulations on seasonal rentals.
Jeju: Showcasing the excesses and opportunities of island tourism
Jeju is perhaps the most emblematic case of an island that has made tourism its engine, with massive spillover effects on land. The island surpassed one million domestic visitors annually as early as the 1970s, broke the 5 million barrier around 2005, and has stabilized in recent years around 11 to 13 million visitors per year. In 2023, it welcomed 13.34 million tourists, mostly Korean (94.7% of the 12.63 million visitors recorded were domestic).
A bustling short-term rental market
This attractiveness is reflected in the seasonal rental market figures: over 12,600 sales related to short-term rentals were recorded in the first half of 2024, and the number of Airbnb listings increased by 8% in one year to reach 20,092 accommodations. Average occupancy rates hover around 42%, with a daily price of about $101 and an estimated potential monthly revenue of $4,080.
This is the amount in billions of dollars invested in the Jeju Shinhwa World project, illustrating the scale of luxury hotel and residential developments on the island.
Soaring prices fueled by tourists and foreign investors
The numbers illustrate the speed of the increase:
– residential real estate prices on the island increased by 10% in 2023, more than double the national average;
– land value in Jeju rose 40% between 2012 and 2016, and certain areas like Seogwipo saw prices soar by 150% between 2000 and 2010;
– the average price per square meter for housing is around 5 million won, with significant premiums for coastal sectors: Jeju City, Seogwipo, Jungmun-dong, or the southwest coast.
Rents follow the same trend: over 5,000 rental transactions were recorded in 2024, with an average 3% increase in apartment rents and an average deposit around 59.9 million won in July 2024.
Between 2011 and 2014, Chinese property ownership on Jeju Island increased by 483.7%.
Real estate investment immigration programs have reinforced this trend. Since 2010, a foreigner investing in tourist or recreational facilities above a certain threshold (initially $500,000, later raised to over one billion won) can obtain an F-2 visa, then a permanent residency permit (F-5) after five years. The system, extended until 2026, has attracted massive investments: 860 billion won in the first six months of 2014, and 29 billion won in 39 transactions in 2023 alone.
Local tensions and a shift towards more sustainable tourism
This upscaling is not without consequences. In highly sought-after beachfront sectors or near protected natural areas, prices are soaring faster than local incomes, pushing some households to move inland on the island, where real estate values are lower but also declining. The proportion of properties sold with leaseback arrangements (sale with leaseback) reached 18% in 2024, a sign that investment for rental dominates.
Facing risks of saturation and backlash, Jeju Island has implemented a repositioning strategy. This includes combating price gouging (lowering weekday hotel rates below 100,000 won and reducing the price of some typical dishes from 70,000 to 30,000 won), implementing regional tourism vouchers, supporting ‘workation’ (with over 10,000 people teleworking on the island in 2023), and promoting longer, more responsible stays.
The island is also positioning itself as a laboratory for ecological transition, with the “Carbon-Free Island JEJU by 2030” strategy, smart city urban planning, eco-designed accommodations, and a policy to protect gotjawal (primary forest) through conservation funds. But the tension between tourism valuation and the right to housing remains strong, especially as risks of sea-level rise and erosion (4.26 mm per year sea-level rise, 1 meter of coastal retreat every ten years) are pushing some buyers to favor the interior over the most exposed coastal areas.
Busan: A port city where tourism reshapes neighborhoods
Busan presents another face of tourism impact: that of a large coastal metropolis, the country’s second city, where beaches, the port, culture, and commerce form a highly attractive ecosystem for visitors… and for real estate investors.
The number of foreign tourists has exploded in recent years: 482,000 in 2022 (vs. 152,000 in 2021), then over 2.9 million in 2023, a 60.9% increase, even exceeding the 2019 record (2.687 million). The recovery is described as “abrupt,” with a return to pre-pandemic levels by spring 2024.
A very dynamic short-term rental market
This boom is reflected in the development of short-term rentals. In September 2024, Busan had 7,997 active Airbnb listings, rented an average of 223 nights per year, with a 61% occupancy rate and a daily rate of about 101,903 won (nearly $90). In May 2024, 132,300 nights were booked there via the platform.
The generated yields are attractive enough to capture investors’ attention, including foreigners. Some neighborhoods indeed combine all the sought-after assets: sea view, proximity to beaches, vibrant nightlife, good transport connections, and a strong tourist image.
Coastal neighborhoods turned into investment products
Haeundae-gu, with its iconic beach and densely built waterfront, illustrates this transformation. Long a popular beach area, the sector has become one of the most expensive in the country: a two-bedroom apartment there can exceed one million dollars, and some seafront residential skyscrapers (Haeundae I’Park, Marine City) trade for over $1.5 million. Rental yields there are around 3 to 4%, slightly higher than in central Seoul neighborhoods, but the value increasingly relies on tourist attractiveness and land scarcity.
The Gwangalli Fireworks Festival in Busan attracts over one million visitors.
Neighborhoods like Nampo-dong (shops, markets, festivals) or Seomyeon (commercial and transport hub, popular with young people) benefit more from urban and shopping tourism but follow the same logic: rising commercial rents, very high pedestrian traffic, development of concept stores, destination cafes, and the emergence of what local players call “365-day commercial districts,” where the combined flow of residents, employees, and tourists guarantees continuous activity. For investors, these micro-zones offer attractive yields on ground-floor retail, but also increase pressure on commercial rents for small local businesses.
Polarization: Tourism winners and lagging neighborhoods
The impact of tourism on Busan’s real estate is not homogeneous, however. Districts like Centum City – which has become a financial and business center, with offices, shopping malls, and high-end residences – see their real estate prices skyrocket, well beyond the national average, supported by public strategy making it a center of excellence.
In Busan, districts like Sasang-gu (logistics) and Jung-gu (heritage) saw their prices drop in 2024 due to aging infrastructure and lack of investment. Even Yeongdo-gu, despite its landscapes and cultural project (Huinnyeoul Culture Village), cannot stabilize its real estate market, notably due to difficult access. Tourism therefore does not benefit all territories uniformly.
The prospect of major events – like the bid for Expo 2030, backed by major projects such as the redevelopment of Busan’s North Port or the C-Bay Park tramway – is already factored in by some investors anticipating a revaluation of the concerned sectors. Again, international experience shows that tourist and transport infrastructure (tramways, subways, express lines) almost systematically translate into price increases nearby, as illustrated in its time by the opening of Seoul Subway Line 5, which led to gains of 17% on single-family homes and 46% on condominiums over three years in the served sectors.
The rise of branded residences: A product shaped by tourism
South Korea is also fully embracing the global wave of branded residences, these residential projects associated with a hotel or luxury brand, promising 5-star services, rental management, and prestige. Globally, this segment has grown over 150% in a decade and is expected to exceed 1,000 projects by 2030. In Asia-Pacific, over 150 projects are already delivered, and as many are under development.
In South Korea, the development of hotel condominiums began in 2008 with The Ananti Hotel. Local groups (Lotte, Hanwha Resorts) later adopted this model, followed by international chains (Marriott, Banyan Tree, Capella, Accor, Hilton). Their business model is designed to capture tourist value, combining owner usage and seasonal rental to a diverse clientele: affluent domestic tourists, medical tourists, and international clientele.
Available data indicates that branded residences sell at an average premium of 35% over comparable unbranded products in the same area, and this differential can climb to 70% in emerging markets. In South Korea, this premium is particularly marked in resort destinations: in Jeju, the built price per square meter reaches about $15,084 on average, but branded residences trade up to four times this level; in Gangwon-do, a highly touristic region for its mountains and ski resorts, branded programs reach six times the local average price. For comparison, Seoul has the highest built price in the country, at $28,713 per square meter.
These residences are clearly a touristic investment product. They offer owners the possibility of entrusting rental management to a hotel brand, benefiting from maintenance and concierge services, while enjoying their personal stays. From a destination’s perspective, they boost tourism revenue and land value, but they also accentuate gentrification and the scarcity of accessible housing for residents, especially when they replace traditional housing.
Domestic tourism, MZ generation, and new expectations: A diffuse but continuous pressure
It would be reductive to analyze tourism’s impact on real estate only through the prism of foreign visitors. The majority of the market relies on Koreans’ own travel. In 2015, some 238.3 million people took domestic trips (including day trips), for a total expenditure of 14.4 trillion won in 2014. Koreans’ overseas travel also exploded, but the health crisis redirected a significant portion of spending towards the national territory.
Searches for campsites surged 54% on T-map in 2021, illustrating the MZ generation’s enthusiasm for this type of stay.
This wave notably modifies the markets of Jeju, Busan, Gangwon-do, but also medium-sized cities and picturesque rural areas. In some hanok villages, the influx of visitors charmed by traditional houses converted into cafes, shops, or guesthouses causes rapid price increases, a transformation of the commercial fabric, and the gradual departure of families who no longer feel at home in these places.
Foreign capital: Opportunities, speculation, and public debate
Parallel to tourist demand, foreign capital is strengthening its presence in the Korean real estate market. Over the past five years, the number of foreign owners increased from 153,083 to 232,951, a 52.2% rise, and the number of represented countries climbed from 101 to 121. In the first half of 2024, foreigners owned 95,058 residential properties, an increase of 8.98% year-on-year.
Nearly 70% of residential properties owned by non-Koreans are concentrated in the capital region (Gyeonggi 36%, Seoul 23%, Incheon 10%). The main holders are Chinese (56% of the stock), followed by Americans (22%), Canadians (7%), and Taiwanese (3%). An increase in acquisitions by nationals from Southeast Asia (Vietnam, Myanmar, Laos) and Central Asia (Uzbekistan, Kazakhstan) is also observed, linked to the arrival of migrant workers and parents financing studies.
In the luxury segment, foreigners represent over 10% of buyers in 2024, in a market expected to grow from $43.56 billion in 2024 to $70.18 billion in 2029. At the same time, foreign investment in Korean commercial real estate reached $2.3 billion in 2023, a 23% increase compared to the average of the previous three years, and foreign direct investment in real estate grew 20% in the first half of 2024.
Some economists, like Professor Kwon Dae-Jung from Sogang University, argue for more refined regulation of non-resident buyers to prevent them from circumventing anti-speculation rules imposed on nationals.
Professor Kwon Dae-Jung, Sogang University
Between tourism growth and the right to housing: What rebalancing options?
The tensions observed in Korea – soaring rents in certain neighborhoods, gentrification, resentment towards luxury programs geared towards visitors rather than residents – are not unique. Barcelona, Lisbon, Venice, New York, or the Canary Islands have faced the same debates, sometimes leading to moratoriums on new tourist housing or specific taxes to fund affordable housing.
While South Korea has not yet embarked on such a radical shift, several levers are emerging or could be considered in light of foreign experiences:
To mitigate the negative effects of mass tourism, several measures can be implemented. These include strengthening and simplifying short-term rental regulation (clarifying permitted properties, instituting quotas per neighborhood, limiting rental days, requiring platform transparency). Dedicated taxation, such as enhanced tourist taxes or surtaxes on luxury second homes, can fund affordable housing funds. Inclusive urban planning can condition major tourism projects on the creation of rent-controlled housing. It is crucial to involve local communities in defining development plans to preserve the social fabric. Finally, seasonal management and decentralization of demand, via pricing and transport policies, can reduce pressure on saturated zones and better distribute economic benefits.
Korea has a major asset: a tradition of centralized planning, significant public investment capacity, and a tourism sector already structured around qualitative objectives (wellness tourism, gastronomy, K-culture content, digital tourism). The challenge will be to align these ambitions with a housing policy that does not leave middle and working classes behind, especially in the cities and regions that tourism puts in the spotlight.
Conclusion: A fragile balance to be invented
The impact of tourism on the real estate market in South Korea is neither simply “good news” for investors nor a uniform catastrophe for residents. It rather paints a contrasted geography: some Seoul neighborhoods where Airbnb already plays a measurable role in price increases, coastlines like Busan or Jeju where tourist residences are reshaping urban and social landscapes, resort regions where branded residences break price records, and entire swathes of territory that remain outside this windfall.
Tourism growth and the influx of capital into real estate raise the crucial question of benefit distribution. This “tourism premium,” visible in rents and land values, requires clear political choices, fiscal and regulatory adjustments, and vigilance on the social and environmental sustainability of a model where the hospitality and housing economies are now intertwined.
A French entrepreneur, around 50 years old, with a financial portfolio already well-structured in Europe, wanted to diversify part of his capital into residential real estate in South Korea to seek rental yield and exposure to the South Korean won. Allocated budget: $400,000 to $600,000, without leveraging credit.
After analyzing several markets (Seoul, Busan, Incheon), the chosen strategy was to target an apartment in a recent building located in a growing neighborhood of Seoul or Busan, combining a target gross rental yield around 7–8% “the higher the yield, the greater the risk” and medium-term appreciation potential, with an all-in cost (acquisition + fees + potential renovations) of about $500,000. The mission included: market and neighborhood selection, connection with a local network (real estate agent, lawyer, tax specialist), choice of the most suitable investment structure (direct ownership or dedicated vehicle), and definition of an international diversification plan over time.
Disclaimer: The information provided on this website is for informational purposes only and does not constitute financial, legal, or professional advice. We encourage you to consult qualified experts before making any investment, real estate, or expatriation decisions. Although we strive to maintain up-to-date and accurate information, we do not guarantee the completeness, accuracy, or timeliness of the proposed content. As investment and expatriation involve risks, we disclaim any liability for potential losses or damages arising from the use of this site. Your use of this site confirms your acceptance of these terms and your understanding of the associated risks.
Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
