KUALA LUMPUR - Home purchases by foreigners in Seoul have dropped by more than half following the government’s move to designate the entire city as a real estate transaction permit zone for foreign nationals.

The Ministry of Land, Infrastructure and Transport said it analysed housing transaction data in the greater Seoul area from September to December after the new permit requirement was introduced in late August, as reported by Yonhap News Agency.

Under the measure, foreigners must obtain prior approval before buying homes in designated areas for one year until August 25.

The data showed that foreign housing transactions across the capital region fell 35 per cent year-on-year to 1,481 deals from 2,279.

In Seoul, transactions declined by 51 per cent to 243 deals from 496, marking the steepest drop in the region.

Meanwhile, Gyeonggi Province and Incheon recorded declines of 30 per cent and 33 per cent respectively.

In Seoul’s affluent districts of Gangnam, Seocho, Songpa and Yongsan, foreign property transactions plunged by a combined 65 per cent, the ministry said.

By nationality, purchases by Chinese buyers fell 32 per cent year-on-year to 1,053 units.

Transactions involving United States nationals also dropped sharply, declining 45 per cent to 208 units.

South Korea began enforcing stricter real estate transaction rules for foreign buyers last week, as part of efforts to curb speculative property purchases involving suspicious overseas funds, the land ministry said on February 9.

Under revised enforcement regulations of the Real Estate Transaction Reporting Act, foreign nationals signing property purchase contracts from February 10 will be required to disclose their visa status and whether they qualify as legal residents when submitting transaction reports to local authorities.