Foreign buyers are purchasing desirable properties, prompting discussions for stricter property market regulations to ensue
Downtown Seoul skyline, with its numerous apartment complexes, was captured from Yeouido Square Tower on August 16, 2022 [YONHAP].
The South Korean real estate market is undergoing transformative changes, with an increasing trend in foreign ownership and a burgeoning co-living sector. Over 230,000 foreign nationals now own properties in South Korea, marking a 52.2% rise from 2020 [5]. Chinese and Southeast Asian investors are particularly active, focusing on properties within the greater Seoul area [5].
In response to changing lifestyle preferences and demographic shifts, co-living establishments are gaining traction. Government initiatives and the influx of Real Estate Investment Trusts (REITs) are expected to further stimulate the sector's growth [1]. Companies such as IGIS Residence REITs and Koramco Asset Trust are concentrating on rental housing portfolios and co-living developments [1].
Institutional investment in South Korean real estate is anticipated to climb, with public-private initiatives targeting long-term rental housing. Efforts are underway to convert unsold officetels into rental projects, shifting towards monthly rental agreements [1]. Additionally, South Korean investors exhibit growing interest in alternative investments, like private equity, primarily within the region [2].
The Seoul government is providing ongoing support for the co-living and rental housing sectors to promote the development of rental housing options. This support, combined with the proliferation of REITs, is expected to foster market stability and growth [1]. The local real estate market is also being influenced by supply and demand dynamics, with commercial real estate activity being closely monitored by companies like Cushman & Wakefield [4].
In other developments, Seoul's Baeksa Village in Nowon District is currently under demolition, as seen in an aerial view on May 15 [YONHAP]. Meanwhile, a bird's-eye perspective of the city's apartment complexes was captured from the Lotte World Tower in southern Seoul on February 13 [NEWS1].
[1] "Current Trends and Policies in Seoul's Real Estate Market" (JoongAng Ilbo, June 12, 2022)[2] "South Korean LPs Prefer Domestic Private Equity Investment" (PE Hub, December 16, 2024)[4] "Seoul Real Estate Market Insights" (Cushman & Wakefield, Monthly Reports)[5] "Foreign Investment in South Korean Real Estate Rises by Almost 52%" (Korea JoongAng Daily, April 20, 2022)
- The increasing foreign ownership in the South Korean real estate market, particularly from Chinese and Southeast Asian investors, is reshaping the industry.
- Government initiatives and the growth of Real Estate Investment Trusts (REITs) are propelling the co-living sector, with companies like IGIS Residence REITs and Koramco Asset Trust focusing on rental housing portfolios and co-living developments.
- Institutional investment in South Korean real estate is anticipated to increase, with a focus on long-term rental housing and alternative investments like private equity.
- The Seoul government is supporting the co-living and rental housing sectors to promote the development of rental housing options, aiming to foster market stability and growth in the local real estate market.
