July 14 (UPI) -- Foreign buyers of South Korean real estate, including investors from mainland China, are accumulating high-priced apartments in some of Seoul's exclusive neighborhoods amid stricter regulations targeting domestic buyers and investors, according to a local press report.
News 1 reported Tuesday the child of a high-ranking Chinese Communist Party official recently purchased two upscale condominiums in the tony district of Gangnam in the South Korean capital. Each unit cost the buyer at least "millions of dollars," according to the report.
Cash-rich foreign buyers are also flocking to the Signiel Residences, a luxury property located in Lotte World Tower, a 123-story skyscraper that opened in 2017.
Foreign purchases have been soaring in South Korea, where Chinese buyers account for more than 60 percent of foreign investments in real estate. Foreign buying dropped during the peak of the COVID-19 pandemic in Korea, but was up 16 percent by May, according to Seoul.
Middle-class South Koreans seeking to purchase property in Seoul face greater hurdles to homeownership due to new government regulations. In January, the average Seoul apartment price stood at $760,000, but Seoul recently raised restrictions on home loans for apartments valued at about $500,000 or higher.
In order to stabilize housing prices, the administration of President Moon Jae-in is also moving forward with record-high taxes on real estate to discourage people from owning multiple homes.
Im Mi-hwa, a professor in the real estate department of Jeonju University, said the regulations targeting domestic owners of multiple homes provides opportunities for foreigners who face fewer restrictions. Foreign real estate speculations could trigger complaints of "reverse discrimination" among domestic buyers, Im said.
South Korea's main opposition conservatives suggested Tuesday the government's real estate policies would only increase economic inequality, Yonhap reported.
Economist and politician Kim Chong-in said heavier taxes would not affect the rich, who can afford to pay the fees.
"If taxes could solve the real estate problem, housing prices should have stabilized," Kim said.
The median price of apartments has risen 52 percent in the past three years since Moon assumed office.