Jeju Island has been a popular spot among foreign travelers and visitors. Some people claim that it’s one of the most beautiful islands they’ve ever visited. With waterfalls, a special local culture, crystal clear water and big green landscapes, it’s hard to disagree.
Foreign ownership regulations are also among the best in the region. And with the right amount of money, you’ll even get permanent residency when buying property. Sounds tempting?
Many people ask if it’s still a good bet to invest in Jeju Island. In this article, I explain the basics. Let’s start with the real estate market.
Jeju Island’s real estate market
Jeju Island was considered a good market for real estate investments in hospitality properties, like resorts, villas, and vacation homes, but the market has cooled down a bit.
This small island witnessed a boom in the real estate market during the past years, due to an increased influx of foreigners, especially Chinese. A well-known reason is because it’s located with proximity to some of the wealthier Chinese cities, like Shanghai and Beijing.
A lot of investment was made in land purchases, developments of new vacation homes, and beach resorts, again, mostly from China.
Favorable government policies have played a positive role for Chinese investments.
For example, in 2010 Jeju Island’s local government allowed foreigners to receive permanent residency if they invested a certain amount of money. These investments mostly came in the form of real estate investment.
In 2009, the total area covered with properties was only 49,000 square meters, which has now increased to more than 485,000 square meters.
According to estimates, 80-90% of foreign tourists, as well as foreign investment to Jeju Island, comes from China. It also offers friendly visa regulations to Chinese investors and tourists and other countries.
For this reason, a lot of Chinese investors were specifically targeting the Chinese market, resulting in the steady growth. For example, China’s largest developer, Greenland Group has developed several residential projects in the last few years.
However, this sharp increase in residential units has slowed down the growth of the real estate sector.
The demand simply can’t keep up with the increased supply. To counter this, the Korean government has started to restrict permits for new constructions.
After March 2017, we saw a big change when the Chinese government asked travel operators in China to stop selling tour packages to Korea. This severely affected tourism and subsequently the real estate sector on Jeju Island.
Also, there were a few protests against the ever-increasing tourists and foreigners by the locals. Due to these protests, the Korean government has also suspended the plan for the second airport.
The anti-tourists protests, as well as political tensions between the two countries (over the installation of American anti-missile system by Korea), are causing a decline in investments from China, affecting the market.
Even if the number of tourists and investments slumped, Jeju Island still attracts a significant number of Chinese visitors and investors.
One example is the mega casino project that’s built by a well-known Chinese developer, and how it became a success, despite political tensions.
Where should I buy property on Jeju Island?
Jeju City is the capital city of the self-governing Jeju island, one of the nine provinces in Korea. It’s a popular destination for local Koreans, as well as foreigners, mainly Chinese tourists.
In the last few years, many Chinese have also acquired permanent residency, mainly in Jeju City, which resulted in a real estate boom. As you only need to invest a certain amount to get permanent residency irrespective of your nationality, it’s also called “a Free International City.”
For this reason, settling in Jeju Island is very easy thanks to its vibrant and ever-growing expat community.
Below follows a few places that should be of interest to real estate investments.
Jeju City is the largest city and also the capital city. It’s the only city that has an international airport as well as a seaport. This makes it the main entry point to the island, not surprisingly, property prices are higher than the other major city, Seogwipo.
The total population of Jeju City is 600,000, and almost all of the expats on Jeju Island live in Jeju City, with the exception of a small number who live in the neighboring Seogwipo City.
The most popular area in Jeju City for expats is Jeju City Hall area, which is also the city center and the business district.
The area is known for its bars, restaurants, shopping malls, and live music venues.
As mentioned above, Seogwipo is the second biggest city with a population of 160,000 people.
It’s known for its beaches and tourist resorts and makes a good option if you want to invest in hospitality properties.
Jungmun Tourist Area
This is a neighboring area of Seogwipo City that‘s specifically developed for tourists. The Jungmun Tourist Area is also a good option for investment in hotels and tourist villas.
The area is filled with most popular tourist attractions on Jeju Island, along with restaurants, shopping malls, hotels, villas, and resorts.
Do I need a visa to Jeju Island?
As Jeju Island enjoys a status of Special Autonomous Province, it has different visa and immigration policies than Mainland Korea.
Jeju Island offers visa-free entry to the residents of 180 countries, including China. The visa-free entry is valid for 30 days.
Only 11 countries need a visa to visit Jeju Island, including Afghanistan, Syria, Cuba, Sudan, Ghana, Palestine, Iran, Macedonia, Iraq, Libya, and Nigeria.
In addition, anyone who can buy a property worth USD 500,000 or more can have permanent residency on Jeju Island.
Jeju Island property prices
If you compare Jeju Island with other parts of Korea, prices have increased more on average in the past years. Back in 2015-2016, land prices increased by around 20%, the biggest increase in the country. Rates have been reduced to annual price increases of around 7%.
The average price per square meter of an apartment in the city center (Jeju City) is USD 5,300 (approximately 6 million Won), while the average price per square meter of an apartment in the outskirts of the city is USD 3000 (approximately 3.5 million won).
On average, the housing price in Jeju Island ranges from USD 2,700-7,000, based on the area where you are buying property.
All in all, to summarize the condition of the real estate market of Jeju Island, we can say that the real estate market is slowing down due to declining Chinese investments in the real estate sector. The island is still doing better, or at par, if compared to other parts of the country.
Due to the overwhelming Chinese investment in the property market, the real estate market heavily depends on the relationship between the two countries.
With better relationships in the future, we can expect another property boom.
I also recommend you to read my separate article to learn how you can buy Korea property as a foreigner.