Apartment complexes are seen from Lotte World Tower, Korea's tallest skyscraper, in southern Seoul, Sunday. Yonhap

The government is facing growing calls to tackle loopholes that let foreign nationals avoid tighter housing rules introduced to bring down surging home prices and prevent land speculation, industry analysts said Monday.

Such loopholes are mainly associated with mortgage ceilings and taxes for owning multiple homes. The relevant regulations have been disputed as Korean nationals are subject to stringent screening to take on loans and heavy taxation for owning two or more homes.

But the rules do not apply to foreign nationals, prompting concerns that they discriminate against the country's own citizens and fail to address housing market problems, the analysts said.

"The problems need to be resolved urgently, as wealthy foreign nationals are buying homes at higher prices and add to volatility in the housing market," said Kwon Dae-jung, a real estate professor at Sogang University.

The professor referred to two recent cases of foreign nationals' home buying sprees in Seoul's pricey neighborhoods.

An Uzbek bought a 244-square-meter apartment unit in Banpo, southern Seoul, for a record 7.4 billion won ($5.09 million), while a Malaysian also paid a record 18 billion won for a 268-square-meter apartment unit in Hannam-dong, Yongsan District.

The cases come as the number of homes owned by foreign nationals has continued to increase, from 83,512 in December 2022 to 87,233 in June 2023, 91,453 in December 2023 and 95,058 in June 2024. The survey on foreigners' home ownership is released every May and November by the Ministry of Land, Infrastructure and Transport.

Under the circumstances, Kwon said the home purchases in Banpo and Hannam suggest "growing influence of the foreign nationals on the domestic housing market."

The professor attributed the foreign nationals' home buying sprees to a lack of housing policy for foreigners who therefore can get sufficient loans from abroad regardless of their income.

According to industry officials, they prefer borrowing money from their respective countries due to the complicated process and paperwork required by banks in Korea.

"But even so, Korean nationals are in a more unfavorable condition to buy homes," Kwon noted, referring to stressed debt service ratio and other toughened housing rules that determine a loan's maximum amount based on a borrower's income.

The professor brought up cases of homes owned by minors from China and the United States, saying "Such cases are unthinkable for Koreans in the corresponding age group as they apparently do not have sufficient income to buy a house."

Asked whether imposing the same, tougher lending rules for foreign nationals would be against international norms, Lee Ki-ho, president of Global Real Estate Association of Seoul, said "it would not problematic at all."

"The real estate policy can vary depending on countries' goals for investments," he said.

Members of the same household are imposed with an additional tax for home ownership if they have two or more houses.

To apply the same rule to foreign nationals, authorities will need to rely on paperwork concerning buyers' family relationships, which can be "forged intentionally for purpose of land speculation," said one real estate agent, who declined to be named.

"Korean home buyers are facing tougher tax rules to own multiple homes, whereas it is not the case for foreign nationals," the agent said. "The government may find it cumbersome to set more detailed housing rules for foreign nationals, but such efforts are getting crucial as their demand for homes here keeps increasing."