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What will happen in South Korea’s real estate market? Will prices go up or down? Is Seoul still a hotspot for foreign investors? How is South Korea’s government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with real estate agents, developers, and clients who buy properties in South Korea, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
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1) South Korean real estate will attract more foreign investors as the won weakens
The weakening of the Korean won is making South Korean real estate more appealing to foreign investors.
With the Korean won losing value against major currencies like the US dollar, foreign investors are finding they can get more bang for their buck. For instance, in April 2024, the exchange rate jumped by 7.3% from the previous year, hitting 1,382.2 won per dollar. This shift means that buying property in South Korea is cheaper for those with stronger currencies.
Even with the currency drop, South Korean real estate is still a bargain compared to other big markets. This affordability, paired with the chance for long-term growth, makes it a hot investment. In fact, foreign direct investment in Korean real estate shot up, with capital inflows rising by 20% in the first half of 2024.
Another perk of the won's depreciation is the potential for higher returns on investment for foreign buyers. As their property values increase over time, the initial lower purchase price in won can lead to substantial profits.
For those eyeing the South Korean market, this is a golden opportunity. The combination of a weaker won and affordable real estate prices is a win-win for investors looking to maximize their returns.
Sources: Hani, Asian Investor, Business Korea
3) Jeju Island's rental market will grow as more domestic tourists look for short-term stays
Jeju Island is seeing a boom in its rental market thanks to the surge of domestic tourists looking for short-term stays.
In 2023, a whopping 94.7% of Jeju's visitors were domestic tourists, with 12.63 million people flocking to the island. This shows a strong preference for local travel experiences among South Koreans. The demand for short-term rentals is evident, with an 8% increase in Airbnb listings over the past year, bringing the total to 20,092 available options.
These rentals are doing well, with an average occupancy rate of 42% and a daily rate of $101. This means property owners can expect a monthly revenue of around $4,080. The Jeju Tourism Organization is also playing a big role in this trend. They've been promoting the island as a top domestic destination through campaigns like "Promise with Jeju," which focuses on sustainability and cultural respect.
These efforts are paying off, as Jeju's charm is being highlighted in media coverage and social media trends. This strategic marketing is reinforcing Jeju's status as a favorite travel spot for South Koreans. The island's natural beauty and unique culture are big draws, and the local agencies are making sure everyone knows it.
With more domestic tourists choosing Jeju, the rental market is set to thrive. The combination of increased listings and strategic marketing is creating a perfect storm for property owners. As more people discover Jeju's allure, the demand for short-term accommodations will likely continue to grow.
Sources: Invest Korea, AirDNA, MK, WTTC, Korea Times
4) Demand for homes with outdoor spaces and fitness amenities will grow due to health and wellness trends
In South Korea, health and wellness trends are booming, especially in 2023 and 2024.
With over 605.8 thousand medical tourists visiting in 2023, the country is becoming a hotspot for health services. This surge in medical tourism is a clear sign that people are increasingly interested in properties with fitness and wellness amenities.
The fitness equipment market is also on the rise, valued at $145.4 million in 2023 and growing annually by more than 9% until 2028. This growth shows that more people are prioritizing physical activity, which means properties with gyms and fitness facilities are in high demand.
In cities like Seoul, urban planning is focusing on creating more green spaces and urban gardens. These initiatives are part of a climate action plan to make cities more walkable and reduce carbon emissions. Such efforts emphasize the importance of green spaces in urban planning, which can greatly influence property trends.
For potential property buyers, these trends mean that homes with access to outdoor spaces and fitness amenities are becoming more desirable. As more people seek healthier lifestyles, the demand for such properties is likely to continue growing.
Sources: Statista, GlobalData, Korea Times
5) Demand for senior-friendly housing and retirement communities will grow as the population ages
South Korea's population is getting older, with over 17.6% aged 65 or older in 2022.
By 2025, this number is expected to surpass 20%, and by 2035, more than 30% of the population will be over 65. This shift means there's a growing need for homes that cater to seniors. The government is trying to keep up by building age-friendly infrastructure, but making these homes affordable is still a challenge.
Many older adults in South Korea want to live on their own, often in single households. This preference is pushing the demand for housing that supports independent living while offering the necessary amenities and support.
The senior housing market is responding quickly. In the first quarter of 2024, the absorption rate in this sector jumped by 40% compared to the previous year. This growth is especially noticeable in urban areas like Seoul and Gyeonggi-province, where retirement communities and senior welfare facilities are popping up.
For those considering buying property in South Korea, this trend means there are opportunities in the senior housing market. Investing in areas with a high demand for senior-friendly homes could be a smart move.
As the population continues to age, the demand for these types of properties is only expected to grow, making it a potentially lucrative market for investors.
Sources: NIC MAP Vision, JLL, Savills
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7) Demand in the residential real estate market will grow due to new tax incentives for first-time homebuyers
New tax incentives for first-time homebuyers are set to boost the residential real estate market in South Korea.
In the first quarter of 2024, 92,100 people bought their first home, a significant 35% jump from the previous year. This surge shows a growing interest in homeownership among newcomers.
South Koreans have a strong preference for real estate investment because of its stability and potential for long-term returns. With these new tax incentives, the demand for homes is expected to rise even more.
The real estate market in South Korea is projected to grow by 1.10% from 2024 to 2029. This growth suggests that the market is active and could expand further with the right incentives.
Historically, tax incentives have proven effective in boosting homebuying. For instance, the temporary investment tax credit reintroduced in 2023 had positive effects on investment and likely encouraged more home purchases.
These new incentives could be a game-changer, especially for first-time buyers looking to enter the market. With the right support, the residential real estate sector could see a significant uptick in activity.
Sources: PWC, Korea Times, Statista
8) Interest in hanok-style homes will grow as cultural heritage becomes a key selling point
There's a growing buzz around traditional hanok-style homes in South Korea.
One big reason for this is the government's push to preserve these cultural gems. The Seoul Metropolitan Government is offering subsidies and loans, making it easier for people to fix up and maintain their hanok homes. This financial help is a game-changer for those wanting to invest in these historic properties.
Tourism is another major player in this trend. With a 74% jump in foreign tourists in early 2024 compared to the previous year, many are eager to experience staying in a hanok guesthouse. This influx of visitors has turned hanok districts into hot tourist spots, shining a light on the cultural significance of these homes.
Social media and traditional media are also fueling the hanok craze. By highlighting their beauty and history, these platforms have caught the eye of younger generations. Many young people are now looking to reconnect with their roots by embracing traditional living experiences in hanok homes.
Insider tip: Some hanok homes are being transformed into chic cafes and boutique hotels, blending old-world charm with modern comforts. This fusion is attracting a new wave of interest, especially among those who appreciate both history and contemporary style.
As cultural heritage becomes a bigger selling point, expect to see more people drawn to the unique charm of hanok homes. These traditional houses are not just places to live; they're a way to experience a piece of Korea's rich history.
Sources: Asian Art Newspaper, ICOMOS Open Archive, Skift, Korea.net
We have made this infographic to give you a quick and clear snapshot of the property market in South Korea. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) Demand for homes with office spaces will grow as remote work becomes more popular
The rise of remote work is reshaping how we think about our homes.
In South Korea, many have embraced working from home, with two-thirds of workers enjoying the flexibility it offers. This shift has sparked a desire for homes with dedicated office spaces, allowing people to work comfortably and efficiently. Interestingly, 37% of remote workers already have a dedicated home office, underscoring the demand for such spaces.
The home office furniture market in South Korea is booming, with projections showing significant growth from 2024 to 2029. This surge is driven by the need for ergonomic and versatile furniture that enhances productivity and comfort at home. As more people seek to create ideal work environments, the furniture market reflects this broader trend.
Real estate is catching on too. Listings in South Korea are increasingly highlighting homes with dedicated office spaces, catering to the growing number of remote workers. This shift in consumer preferences is influencing architectural trends, with new home designs now incorporating office spaces to meet these needs.
For those considering buying property in the country, it's worth noting that the demand for homes with office spaces is not just a passing trend. The growing popularity of remote work is likely to continue, making such features a valuable asset in the real estate market.
As remote work becomes more entrenched, the desire for homes that accommodate this lifestyle will only grow. This trend is reshaping both the housing market and how we view our living spaces.
Sources: Statista, Exploding Topics, Statista
10) More foreign buyers will focus on South Korea’s luxury real estate, especially in Seoul’s wealthy areas
Foreign buyers are eyeing South Korea's luxury real estate, especially in Seoul's upscale areas, more than ever.
In 2023, foreign investments in Korean commercial real estate hit $2.3 billion, a notable 23% jump from the previous three-year average. This surge is largely driven by the allure of Seoul's affluent districts, which offer a blend of modernity and tradition that appeals to international investors.
Chinese investors are leading the charge, making up over 60% of foreign real estate purchases in South Korea. In early 2024, their enthusiasm was evident with a massive $4.8 billion investment, marking an 80% increase from the previous year. This trend underscores the strong interest from Asian investors, who see South Korea as a stable and promising market.
The rise in global wealth is also a key factor, with more high-net-worth individuals seeking luxury properties. As the number of wealthy individuals grows, so does the demand for high-end real estate. South Korea's political and economic stability further enhances its appeal, making it a top choice for those looking to invest in a secure environment.
Seoul's luxury real estate market is particularly attractive due to its vibrant culture, advanced infrastructure, and high quality of life. These elements make it a prime destination for foreign buyers who are not just looking for investment opportunities but also a place to call home.
With its strategic location in Asia and a robust economy, South Korea is poised to remain a hotspot for luxury real estate investments. The combination of cultural richness and economic stability makes it an irresistible choice for discerning investors.
Sources: UPI, Mordor Intelligence, Asian Investor
11) Incheon’s real estate market will boom as it becomes a major logistics hub in Northeast Asia
Incheon is gearing up for a real estate boom as it transforms into a major logistics hub in Northeast Asia.
Significant investments are pouring into Incheon, especially in its port facilities and infrastructure. The Ministry of Oceans and Fisheries is expanding Incheon Port with new container terminals and a larger port backyard, aiming for full automation by 2027. This is crucial to handle the increasing number of shipping containers, making Incheon a key player in regional trade.
In 2023, Incheon Port saw a 20% year-on-year growth in container traffic, thanks to strong trade ties with China, Thailand, and Vietnam. This growth underscores Incheon's strategic importance in the region. Meanwhile, Incheon International Airport is expanding to boost its passenger capacity to 100 million per year, further solidifying its role as a logistics powerhouse.
Big logistics companies are setting up shop in Incheon, including a massive e-commerce distribution center in the Incheon Airport Free Economic Zone. This center is expected to generate significant cargo volume and create numerous jobs, making Incheon an attractive spot for businesses. The airport logistics complex already hosts 40 logistics companies, offering perks like low rent and tariff deferrals.
Incheon's real estate market is catching the eye of developers, thanks to its lower prices compared to Seoul. The combination of strategic location, growing infrastructure, and business incentives is drawing increased interest. The city is becoming a magnet for real estate investment, with its logistics capabilities leading the charge.
Sources: Invest Korea, Korea Times, Air Cargo News
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12) Sejong City's residential real estate market will grow steadily as it attracts more government employees
Sejong City is a magnet for government employees due to its role as a hub for relocated ministries and agencies.
By 2015, 95% of targeted government employers had moved to Sejong, bringing along thousands of public sector workers. This influx has turned Sejong into a bustling center of government activity, making it an attractive place for those in the public sector.
The Korean government has been actively promoting Sejong as an administrative capital, which is a big draw for government employees. This strategy includes efforts to reduce population pressure in the Seoul Metropolitan Area and encourage balanced regional growth, making Sejong a desirable place to live and work.
Sejong's appeal is further boosted by its well-planned infrastructure and public services. The city is designed to accommodate both public agencies and private businesses, which enhances its attractiveness to government workers. The expansion of educational and healthcare facilities has also played a key role in drawing and keeping these employees and their families in the area.
With its strategic development as an administrative capital, Sejong continues to attract government employees. The city's infrastructure and public services are tailored to meet the needs of these workers, making it a prime location for those in the public sector.
Sources: IZA, Global Property Guide
13) Demand for eco-friendly homes with energy-efficient features will grow among environmentally conscious buyers
Eco-friendly homes with energy-efficient features are catching the eye of environmentally conscious buyers.
In South Korea, the government is pushing hard for green housing. By 2025, all new apartments will meet zero-energy standards, meaning they’ll generate as much energy as they use. This bold move shows a serious commitment to sustainable living, nudging more people towards eco-friendly homes.
There are also some sweet government perks for going green. Thanks to the Green Construction Promotion Act, buyers can snag financial support, tax breaks, and subsidies for eco-friendly tech. These incentives make it easier on the wallet to invest in sustainable homes, which is why they’re becoming more popular.
People’s tastes are changing too. More and more, especially the younger crowd, are factoring in the environment when they shop. This shift is clear from the rising sales of eco-friendly cars and appliances, showing a bigger interest in sustainable living.
Eco-friendly homes are not just a trend; they’re becoming a lifestyle choice. With the government’s backing and changing consumer preferences, the demand for sustainable homes is on the rise. Buyers are looking for homes that not only save energy but also align with their values.
As more people jump on the eco-friendly bandwagon, the market for these homes is expected to grow. The combination of government support and consumer demand is creating a perfect storm for the popularity of energy-efficient homes to soar.
Sources: WBGKGGTF, Research and Markets, Daxue Consulting
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.