Korea extended its foreign home-buying permits. The buyers were never in Gangnam.

The Ministry of Land, Infrastructure and Transport said on 20 August that the permit zone covering foreign home purchases in Seoul, most of Gyeonggi and Incheon stays in force for another year, to 25 August 2027. The same day it put 353 outlying islands under a separate permit order, requested by the National Intelligence Service.

Two announcements, one legal instrument, and almost nothing else in common.

What the permit actually catches

Inside the capital-region zone, a foreign buyer must obtain permission from the district office before signing a purchase contract. Not after. A contract signed without it is void, and the Act on Report on Real Estate Transactions provides for up to two years’ imprisonment or a fine of up to ₩20 million.

“Foreign” here is wider than a passport check. Article 2(4) of the Act reaches non-Korean individuals, entities incorporated under foreign law, and — the clause that catches institutional buyers out — Korean-registered companies in which foreigners hold half or more of the capital or half or more of the voting rights. A Seoul-domiciled REIT with a majority overseas sponsor applies for the same permission as an individual.

The size thresholds are small enough to be effectively universal: any residential land share above 6㎡, or above 15㎡ in a commercial zone. Covered types are detached houses, multi-family houses, row houses, multiplex houses and apartments, as classified in the Building Act enforcement decree. Officetels are not on that list.

Geography barely moved. All 25 Seoul districts. Twenty-three Gyeonggi cities and counties — Yangju, Icheon, Uijeongbu, Dongducheon, Yangpyeong, Yeoju, Gapyeong and Yeoncheon are outside. Incheon appears as nine autonomous districts rather than last year’s seven, which is bookkeeping: the city split Jung-gu and Seo-gu into new districts on 1 July, its first redraw in 31 years.

The number the ministry led with, and the one underneath it

From September 2025 to June 2026, foreigners bought 4,397 homes in the capital region, against 6,024 in the same ten months a year earlier. Down 27%. Seoul fell 37%, Incheon 29%, Gyeonggi 23%. Across the three Gangnam districts and Yongsan the fall was 49%; in Seocho alone, 73%. American buying dropped 40% and Chinese buying 24%, though Chinese nationals still accounted for 72% of all foreign purchases against America’s 13%.

Now the composition of those 4,397 transactions.

Gyeonggi took 66% of them. Seoul and Incheon 17% each. Eighty-one per cent were homes priced at ₩600 million or below. Apartments were 62% of the total and multiplex units another 33%.

The steepest declines landed where the least activity was. Seocho’s 73% is a large percentage of a small number. What foreign home-buying in Korea mostly consists of is a mid-priced flat near an industrial complex — Bucheon, Ansan, Suwon, Siheung, Pyeongtaek, Bupyeong in Incheon — bought by someone who works there.

The stock data agrees. MOLIT’s end-2025 count, published on 29 May, puts foreign-owned homes at 108,231, or 0.55% of Korea’s 19.65 million dwellings. Gyeonggi holds 42,000 of them, Seoul 25,000, Incheon 11,000. Chinese nationals own 61,000, Americans 23,000, Canadians 6,500. Foreign-held land runs to 270,176 thousand square metres, 0.27% of the country, and 21.7% of that area by use is industrial.

None of which makes the designation pointless. The government’s stated worry was specific: a buyer funding a purchase from abroad sits outside the lending caps that bind everyone else, and Korea has spent this year tightening those caps hard as households pile into floating-rate mortgages while the Bank of Korea raises rates. Closing a channel that bypasses a rule is defensible on its own terms. It is just a much smaller channel than the Seocho headline implies, and the permit falls on 4,397 transactions to reach the few hundred anyone was actually arguing about.

The islands are a different policy wearing the same clothes

The 353-island order borrows the permit mechanism and nothing else. It came from the National Intelligence Service through interagency consultation, cleared the Central Urban Planning Committee, and is about title to land near the territorial baseline. Ulleungdo is the largest at 72.3㎢, followed by Daeheuksando at 21.2㎢ and Deokjeokdo at 20.8㎢. Two earlier rounds — eight baseline islands in December 2014, another seventeen including the five West Sea islands in February 2025 — had brought the running total to 25.

One measure asks whether offshore money is inflating Seoul apartment prices. The other asks who holds the deed next to a naval approach. Filing them under the same phrase makes the second look like housing policy, which it is not.

The designation is annual. It has now been renewed once, on unchanged boundaries, which is the pattern of a measure the ministry intends to keep rather than unwind. The next renewal falls due in August 2027, and the interesting question is not whether it survives but whether the officetel gap and the ₩600-million median finally get addressed — either by widening the property types or by admitting the zone is drawn around the wrong postcode.

Figures current as of 21 August 2026, sourced to the ministry releases and data portals listed below.