Published on and written by Cyril Jarnias
Long considered a mere barometer of social success, South Korea’s high-end real estate is now a genuine globalized financial asset. Between the rise of local fortunes, the growing appetite of foreign investors, and an increasingly complex regulatory arsenal, the luxury property market in South Korea stands at a crossroads. At the heart of this dynamic, one reality stands out: nearly all the value is concentrated in a few districts of Seoul, while places like Busan and Incheon are trying to carve out a share of the pie.
A Multi-Tens of Billions of Dollars Market
The luxury residential segment in South Korea has crossed the threshold of tens of billions of dollars and continues to grow at a steady pace. According to several studies, the value of the high-end residential market stands at around $46.71 billion in 2024, with other estimates placing it around $41.8 to $42.8 billion. A widely shared projection puts it at $43.56 billion in 2025.
Beyond the snapshot, it’s the prospects that are drawing attention. By 2030, the luxury residential market is expected to reach about $71.21 billion, corresponding to an average annual growth rate of over 7%. Other scenarios extend this dynamic until 2033 or 2035 with rates between 8 and 10% per year, which would push the volume beyond $90 billion.
Wealthy Korean households’ assets are largely dominated by real estate, accounting for more than half of their holdings. Prestige residences hold a central place, serving both as a symbol of social status and a tool for passing wealth between generations.
The Overwhelming Dominance of Seoul
The market is not only large; it is extremely concentrated. Seoul alone captures 72.8% of the luxury residential market value in 2024. In other words, nearly three out of every four dollars invested in South Korea’s high-end segment are in the capital. Busan and other major cities share the rest, with a recurring pattern: about 70% for Seoul, 15% for Busan, 15% for the rest of the country in some analyses.
The average price per square meter in Seoul, in millions of won, more than 2.3 times the national average.
The polarization is such that South Korea shows, among OECD countries, the largest price gap between major metropolitan areas and smaller cities. While the national price index increased by only 0.31% year-on-year in February 2025 (in real terms, a decline), Seoul gained 3.63%, while regional markets recorded their third consecutive year of decline.
Who Buys Korean Luxury: The New Geography of Wealth
To understand the luxury property market in South Korea, one must first look at who holds the capital. The country has a rapidly expanding millionaire population, projected to grow from about 1.3 million individuals in 2023 to 1.64 million in 2028, an increase of approximately 27%. At an even higher level, the number of ultra-high-net-worth individuals (over $30 million in assets) is estimated at nearly 7,840 in early 2025, up from the previous year.
The geographic concentration of this wealth is spectacular. Nearly 68% of HNWI (High-Net-Worth Individuals) reside in the greater Seoul area, and the capital itself hosts nearly half of the country’s millionaires. Logically, this elite turns primarily to the most prestigious neighborhoods south of the Han River.
Investment Strategies of Major Fortunes
Surveys of private bankers and financial institutions describe clear preferences. “Classic” apartments top the list of real estate assets favored by HNWI, followed by apartments in redevelopment projects, highly sought after in areas with strong urban renewal potential. Shopping centers and offices, once very popular, have seen their relative attractiveness decline recently.
A financial sector study reveals that the very wealthy hold nearly half of their real estate assets in commercial properties (offices, retail). However, luxury residences, whether occupied or not, represent an essential part: about 30% for the primary residence, 14% for investment housing, with the rest being land.
There is also a generational factor. Millennial and Gen X millionaires allocate more than 20% of their investable assets to real estate, combining usage, rental yield (often in the prime segment), and a bet on capital appreciation in redeveloping neighborhoods.
Highly Inherited Wealth, But Increasingly Internationalized
An often-overlooked characteristic is the importance of inheritance. More than 60% of wealthy Koreans have received a significant portion of their wealth through inheritance, and a quarter have already started giving to their children. This fuels a long-term strategy to secure the best locations, particularly in Gangnam, Yongsan, or Hannam-dong, for future generations.
Although over 60% of wealthy individuals now hold assets abroad (compared to about 20% five years ago), owning a property in an iconic Seoul residential complex is still considered a must.
Gangnam, Yongsan, Hannam: The Epicenter of an Ultra-Polarized Market
In both the collective Korean imagination and statistics, the so-called “Gangnam” area plays a central role. Historically developed from the 1960s onwards, largely supported by public policies, this southern part of Seoul has established itself as the heart of luxury real estate.
Price Levels by District in Seoul
2025 figures provide a telling glimpse of the gaps between districts:
| Seoul District | Estimated Average Price (KRW/m²) | Typical Range in High-End Segment |
|---|---|---|
| Gangnam-gu | ≈ 25,000,000 | 25 to 40 M KRW/m² |
| Seocho-gu | ≈ 22,000,000 | 25 to 40 M KRW/m² (prime segments) |
| Yongsan-gu | ≈ 20,000,000 | 15 to 30 M KRW/m² |
| Songpa-gu | ≈ 17,000,000 | 15 to 30 M KRW/m² |
| Mapo-gu | ≈ 15,000,000 | 12 to 18 M KRW/m² |
| Seoul Average | ≈ 13,400,000 | – |
In reality, the most prestigious complexes – Nine One Hannam, The Penthouse Cheongdam, Hannam The Hill, Raemian One Bailey, DH Firstier I-Park – trade well above these averages. In some cases, like The Penthouse Cheongdam, units of around 408 m² trade for around $12.2 million. The top quintile of apartments in Seoul averages over 3.3 billion won, compared to just under 500 million for the bottom quintile.
“One Good Property” Rather Than Several Average Ones
A trend observed by professionals is what they describe as the “one good property” strategy: rather than holding several mid-range luxury apartments in secondary areas, many affluent buyers prefer to concentrate their resources on a single exceptionally well-located unit, for example in Gangnam, Seocho, Hannam-dong, or the “Han River belt.”
Seoul’s real estate market is characterized by growing polarization: prices in core market areas (like UN Village in Hannam or Dogok-dong) continue to rise, even after regulatory measures, and hit records (e.g., a Paarc Hannam apartment sold for 18 billion won). Conversely, peripheral neighborhoods, especially in the northern part of the city, stagnate or see prices fall. This dynamic is accentuated by landmark transactions, sometimes financed by foreign capital, creating a narrative where the exceptional seems to become the norm.
Branded Residences and an Escalation of Services
Another driver of polarization: the rise of “branded residences”, luxury residences associated with major hotel brands or premium operators. They command per-square-meter prices significantly above the local market. In Seoul, branded residences reach nearly $28,700 per square meter, compared to just over $10,000 in Busan.
Some luxury residences signed by international hotel groups can trade for up to four times the average per-square-meter price of their area.
A Market Dominated by Apartments, but a Rise of Villas and Houses
The South Korean luxury residential market remains largely structured around apartments and condominiums, representing about 66% of the value in 2024. This weight is all the more logical as the majority of the urban population lives in collective housing, and land constraints in city centers severely restrict the construction of single-family homes.
Breakdown by Property Type and Growth Dynamics
| Property Type | Market Share 2024 | Projected Annual Growth (≈2030) |
|---|---|---|
| Apartments & condominiums | 66.2% | Robust but moderate growth |
| Villas & single-family houses | ≈33.8% | ≈8.16% (the most dynamic segment) |
While apartments retain the bulk of demand, the fastest growth is expected from villas and “landed” houses, with a rate close to 8% per year until 2030. The pandemic experience reinforced the appeal of larger, more private residences, often in quiet residential neighborhoods, sometimes inspired by modernized hanok style with a strong technological component (home automation, energy management, enhanced security).
Sale vs. Rental: A Market Still Very Transaction-Oriented
The dominant economic model remains the sale: about 82.7% of luxury residential revenue in 2024 comes from property transfer transactions. Renting, especially in the very high-end, remains a minority but is growing rapidly, with expected growth of about 8% per year.
The growth of the rental economy is driven by affluent young people and expatriates, who now prefer the flexibility of living in turnkey premium residences, thus avoiding tying up several billion won in a real estate purchase.
A structural shift is also observed from the traditional jeonse system (large deposit, no monthly rent) towards wolse (monthly rent), following a series of scandals and frauds related to deposits. This shift is attracting institutional capital, including foreign capital, interested in portfolios of high-end rental housing generating regular cash flows, even with relatively modest gross yields (about 4.3% in Seoul, higher for smaller units).
The Market Viewed from Abroad: An Open Door, But Under Close Watch
Unlike some very restrictive Asian markets, South Korea in principle allows foreigners to buy real estate with equivalent rights to nationals. In practice, the combination of high prices, complex tax rules, and increasing controls on capital flows limits this “theoretical right.”
Foreign Ownership Figures
Official data shows a continuous increase in the number of homes owned by non-residents. By mid‑2023, about 87,700 homes belonged to foreigners, a figure that exceeded 95,000 in the first half of 2024, an annual growth close to 9%. The vast majority are in the capital region: 36% in Gyeonggi, 23% in Seoul, and 10% in Incheon.
Number of homes owned by Chinese citizens nationwide, representing more than half of all foreign-owned properties.
| Nationality (approx.) | Share of Homes Owned by Foreigners |
|---|---|
| China | 54–56% |
| United States | 22–24% |
| Canada | 6–7% |
| Taiwan | 3% |
| Australia, Vietnam, NZ | Smaller shares |
Transactions conducted by non-residents in the Seoul region have increased sharply, from just over 4,500 in 2022 to over 7,000 in 2024, with annual growth exceeding 26%. In the first seven months of 2025 alone, more than 4,400 purchases had been made, suggesting a new record.
Specific Rules for Foreign Buyers
The visible increase in purchases by non-residents, combined with the price surge in certain segments, has prompted the government to tighten the rules. In the Seoul metropolitan area (including parts of Gyeonggi and Incheon), foreigners must now obtain a specific permit before purchasing a home. This system imposes, in particular:
Purchasing a property off-plan (Vente en l’État Futur d’Achèvement / Pre-sale) is subject to specific conditions: the buyer must commit to moving into the property within four months of its delivery, to actually reside there for a minimum period of two years, and must exercise increased vigilance regarding the origin of funds used for payment.
In case of non-compliance, penalties can reach 10% of the property’s value and go up to annulment of the sale. At the same time, the government has strengthened controls on foreign exchange transactions, requiring precise documentation: transfer certificates, foreign exchange purchase certificates, etc. The use of undeclared funds can lead to criminal prosecution.
The official objective is twofold: avoid a speculative influx of foreign capital and strengthen financial transparency. In the background, the revelation in 2023 that 30 individuals had acquired 8,000 homes crystallized concerns about excessive ownership concentration.
An Increasingly Tight Regulatory Environment
The luxury market in South Korea cannot be understood without considering the role of the state. For a decade, but particularly since the 2020‑2021 surge, authorities have multiplied measures to curb speculation, reduce household debt, and try to cool overheating hotspots – often with ambiguous effects.
Transaction Permits, Loan Caps, Residency Requirements
At the national level, authorities have imposed strict credit caps, notably by limiting loan-to-value (LTV) and debt-to-income (DTI/DSR) ratios. For properties exceeding 600 million won, loan amounts are heavily reduced, with even stricter caps on properties exceeding 1.5 or 2.5 billion won. The DSR stress ratio has been raised, reducing borrowing capacity by several percentage points.
In Seoul, specific zones have been established to regulate transactions. They cover about 27% of the city’s area, including all major luxury districts.
These zones cover about 27% of Seoul’s total surface area.
All major luxury districts are included: Gangnam, Seocho, Songpa, and Yongsan.
– any purchase above a certain size requires authorization;
– the buyer must commit to occupying the property for two years;
– resale and rental are limited during this period.
Penalties for unauthorized transactions can include up to two years in prison or a fine of up to 30% of the land’s value. These measures, meant to curb speculative activity, have sometimes produced the opposite effect in star neighborhoods, where the proportion of reported transactions surged right after each regulatory wave, a sign of demand refusing to die down.
Taxation, Holding Costs, and Environmental Standards
Contrary to the idea of a tax haven, South Korea applies significant taxation on real estate, particularly on high-value properties and multiple ownership. Acquisition taxes start at 4% and increase for premium properties, while annual property taxes can reach 0.4% of the value, with surtaxes in over-concentrated areas. Transaction costs (agent fees, registration duties, legal fees) typically add 5 to 8% to the purchase price, bringing the round-trip costs of a buy/sell cycle up to 14% in some cases.
The South Korean regulatory framework includes ambitious standards like the mandatory Zero Energy Building (ZEB) standard for new constructions since 2017, and smart city policies (Smart City Act). Major developers systematically integrate these requirements into their luxury programs, using environmental certifications and advanced digital infrastructure as key selling points.
Busan and Incheon: The Rising Supporting Players
While Seoul reigns unchallenged in the luxury segment, Busan and Incheon play a growing role, but with very different trajectories.
Busan: A Two-Speed Market
Busan, the country’s second-largest city and a coastal metropolis, presents a particularly contrasted market. Overall, prices have fallen about 5% since the 2022 peaks, with an average around 6.69 million won per square meter in early 2025, down about 1.9% year-on-year. This correction is explained by a combination of weaker demand and significant supply, particularly in new developments outside premium neighborhoods.
The percentage increase in luxury property prices in Busan’s coastal areas since 2022.
| Indicator (Busan) | Approximate Recent Data |
|---|---|
| Average Price m² (all segments) | ≈ 6.69 M KRW (-1.9%/year) |
| Average price per pyeong (some surveys) | ≈ 12.14 M KRW |
| Change since 2022 peak | ≈ -5% (overall market) |
| Evolution luxury segment Haeundae/Marine | ≈ +85% since 2022 (high-end) |
| Long-term rental yields | < 2% (generally) |
| Short-term rental yields (Airbnb) | Median occupancy rate ≈ 61% |
The short-term rental segment is booming, driven by the tourist recovery: over 7,900 active listings on rental platforms, an average occupancy rate above 60%, a median daily rate slightly above 100,000 won. For investors, the city thus offers a paradoxical playing field: difficult to obtain high yields in traditional rentals, but real margins for very well-located assets geared towards tourism.
Incheon: The Rising Star
If one focuses on future growth rather than current volume, Incheon stands out as an expanding “node”. Projections place this port city, backed by the international airport and the Songdo urban project, as the fastest-growing luxury market, with a rate close to 9.1% per year until 2030.
Songdo International Business District, a showcase for “smart city” policies, concentrates part of this dynamic, combining high-end offices, luxury residences, services, and international infrastructure. For buyers seeking a compromise between price, quality of life, international connectivity, and appreciation potential, certain sectors of Incheon are becoming a credible alternative to Seoul, even if the prestige gap remains considerable.
Technology and Sustainability: The New Face of Korean Luxury
Luxury residential real estate in South Korea is no longer just about square footage, views, and address. It is now also played on another field: that of integrated technology and environmental performance. The spectacular rise of the smart home market – valued at $5.45 billion in 2022 and projected to over $18 billion by 2030 with annual growth over 16% – particularly fuels high-end projects.
Home Automation, AI, and Smart City as Implicit Standards
In recent luxury residences, the norm is the integration of complete home automation systems: centralized control of lights, heating and air conditioning, biometric security, energy management, connected appliances. Major Korean groups like Samsung Electronics or LG rub shoulders with international giants (Google, Amazon, Honeywell, Siemens) to equip these homes, while telecom operators (SK Telecom, KT, LG Uplus) provide the underlying 5G and fiber infrastructure.
In smart city projects like Songdo or the Busan EDC Smart Village, residential complexes achieve energy independence exceeding 100% thanks to combinations of solar and geothermal solutions. This illustrates the rapid growth (nearly 19% per year) of the energy management segment, driven by regulatory requirements (ZEB, G-SEED) and buyers’ increasing sensitivity to environmental issues.
For wealthy buyers, added value is no longer found only in the lobby’s marble or the facade design, but also in the ability to monitor in real-time their penthouse’s energy consumption, command their electric vehicle from an integrated app, or remotely control all security systems.
Differentiation Through Services and Experience
Luxury developers are also multiplying spectacular communal amenities to stand out. In Busan, some next-generation complexes offer infinity pools, lounges atop towers with panoramic views, ultra-equipped indoor golf simulators, hotel-level wellness spaces, even novel services like automated safe deposit boxes integrated into common areas.
In Seoul, iconic residences offer services similar to a palace: concierge, coworking spaces, soundproofed music studios, private cinema rooms, wine clubs, and rooftop gardens. In branded residences, these services are often managed by major hotel chains, guaranteeing a residential experience aligned with international luxury hotel standards.
A Market Under Pressure: Shortage, Volatility, and Risks
Behind the image of prosperity projected by South Korea’s luxury property market lie several lines of fragility.
A Structural Supply Deficit in Desirable Areas
Despite an increase in housing starts in 2024 (over 305,000 units launched, mainly thanks to the public sector), national production remains below estimated demand, around 450,000 units per year. A cumulative deficit of about 500,000 homes is thus expected by the end of 2025, with particularly strong tension in the capital region.
Number of new apartments planned in Seoul in 2026, a drop of over 80% compared to 2025.
Interest Rates, Debt, and Macroeconomic Vulnerability
After a phase of brutal monetary tightening in 2022, the Bank of Korea slightly lowered its key rate to 2.75% in early 2025, but effective rates on real estate loans remain high, around 4.2% for new mortgages. The stock of real estate debt exceeds 1,120 trillion won, weighing on the ability of many households to access homeownership.
Although buyers of luxury properties are often less sensitive to credit conditions (cash purchases or modest leverage), the overall health of the market remains dependent on these parameters. A rise in rates, new regulations, or an external economic shock could dampen demand and accentuate the correction already visible in non-capital regions.
Regulatory Complexity and Opacity for Foreign Investors
For a non-resident investor, South Korea can appear as a regulatory labyrinth. Besides specific rules applied to energy, transaction permits, sectoral limits on foreign investment (with some sectors completely closed), there is a mosaic of local devices (permit zones, loan caps, zoned restrictions) that require systematic assistance from professionals: real estate agents, lawyers, tax experts.
This complexity, combined with a perception of lack of clarity in policy changes (alternating between measures favoring supply and sudden demand-side tightening), can discourage some international capital from turning to markets perceived as more predictable.
Outlook: Luxury Becoming More Technological, Selective, and Globalized
Despite these risks, most scenarios converge towards continued growth of the luxury property market in South Korea, but at a more measured pace than during the major 2020‑2021 surge.
In the short term, several factors will continue to support prices in prime neighborhoods: continued growth in the number of millionaires, supply shortage in the best locations, enhanced international appeal through soft power (K-culture), infrastructure modernization (GTX lines, smart cities, major urban redevelopment projects like “The H Hannam”).
In the medium term, the market should become more selective. Properties combining an excellent address, high construction quality, advanced technological integration, and solid environmental credentials are likely to outperform. Conversely, products that are only “luxurious by price,” located in less promising areas or obsolete in terms of energy, could see their value premium shrink.
In the long term, demographics will play a decisive role. With a rapidly aging population and a birth rate at its lowest, domestic demand for large family homes could slow. But at the same time, the rise of single-person households, the influx of highly qualified expatriates, and the possibility of transforming luxury properties into rental investment assets (including through high-end short-term rentals) could offer new growth relays.
For investors and owner-occupiers alike, one thing is certain: in South Korea’s luxury property market, the key is no longer just to “own in Seoul,” but to precisely choose the right address, the right product, the right level of technology, and the right timing in a constantly evolving regulatory environment.
Analysis of the Luxury Real Estate Market in South Korea
A French business owner, around 50 years old, with a well-structured financial portfolio 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 using credit.
After analyzing several markets (Seoul, Busan, Daegu), the chosen strategy was to target an apartment or small residential building in a developing neighborhood like Gangseo-gu (Seoul) or Haeundae (Busan), combining a target gross rental yield close to 8–10% – « the higher the yield, the greater the risk » – and medium-term appreciation potential, with a total outlay (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 expert), choice of the most suitable investment structure and definition of a time-based diversification plan, to integrate this asset into an overall wealth strategy managing legal, tax, and rental risks.
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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.
