If you think Jeju Island is just a vacation destination or a place to fish and grow oranges, then you need to look again.
Over the past five years, this southern resort known for its scenic beaches and volcanic landscapes has attracted an influx of Chinese tourists, all thanks to the 30-day visa-free entry policy and the rise of popularity for Korean culture.
In 2010, the Jeju Island special autonomous province introduced a policy where investors who invest more than 500 million won (US$433,699) in a property on Jeju Island and lived there for more than five years will be granted permanent residency. This policy has made Jeju a popular destination for Chinese investors in cash transactions.
Jeju Island has a total area of 1,848 square kilometres and a population of 600,000. With the construction of a series of major projects, Jeju Island has attracted an influx of capital from local investors who are looking for a real estate investment opportunity in a low-interest-rate environment.
Land prices on Jeju Island rose 19.35 per cent last year, peaking at 4.4 times the national average land price, according to the Korea Land Infrastructure and Transportation Ministry.
According to provincial government data, foreign investors had invested in a total of 2,430 buildings with 356,669 square meters of floor space by the end of December, and 94 per cent of the investors were Chinese. As of September, the Jeju government has issued 1,285 residency visas to 1,580 families, attracting investment of 1,950 billion won, most of which are Chinese.
"The Chinese now have the largest investment capital in the world, and their investment push has boosted the local real estate market thanks to the open visa policy," said Kim Dong Han, a public relations officer at the Jeju Free International City Development Center (JDC), the next investment agency of the Ministry of Land and Resources. "Industrial parks and international campuses are also attracting the attention of domestic investors, and more housing will be needed in the near future to accommodate a growing number of new residents and employees."
At present, many of the major development projects on Jeju Island are being promoted by Chinese companies or joint ventures involving Chinese people.
Genting Singapore Limited, the largest casino operator in South East Asia, and Landing International Development Limited, a Chinese property company listed in Hong Kong, China, have jointly invested $2 trillion in a resort that will include a foreign casino, shopping mall and theme park.
The first phase of the project called "World Resort - Jeju Island" is expected to open next year, and the entire development is expected to be completed by 2018.
In December, the South Korean government approved the construction of South Korea's first for-profit hospital for foreigners by the Greenland Holdings, a Chinese state-owned real estate developer, which is currently under construction in the south coast city of Seogwipo-si.
A Shanghai-based company plans to invest 77.8 billion won to develop a project that includes apartments, beauty salons and advanced medical services for a client base of wealthy Chinese people.
Greenland Holdings is also planning to invest 700 billion won to build the largest building on Jeju Island, "Dream Tower," in cooperation with Lotte Tour Development Co., Ltd. (South Korea).
Constructed by China State Construction Engineering Corporation, one of the largest construction companies in China, the 38-story building features a casino, duty-free shops and luxury apartments near the airport.
Construction is expected to begin in May and be completed in early 2019.
"Jeju Island house prices will continue to rise over the next five years. "Chinese investors offer a lot more than the market price, they buy whatever they want, and they pay in cash like it's just a piece of cake," said Chun Myung-jin, a property manager in Seogwipo-si, "It's a good option for local residents to sell their homes, and with the money from selling locally, they can go elsewhere and buy a few properties."
Another factor that motivates them to resettle is the attraction of elite schools, where all classes are taught by native English speakers.
Currently, there are three elementary and secondary international schools in the Jeju Global Education City (JGEC) on Jeju Island - Korea International School Jeju, North London Collegiate School Jeju, Branksome Hall International School and St. Johnsbury Academy International School, a private boarding school in the United States, will open next September.
In February this year, an upscale 133-square-meter apartment near Jeju City Hall was sold for a whopping 850 million won, marking the highest price for a local home, which was even higher than the price of a house of the same size in west Seoul, which traded for between 700 and 800 million won.
Domestic investors in South Korea are mainly buying condominiums and houses, while Chinese investors are more interested in studio apartments and resorts.
"I have visited Jeju Island a few times and now I want to invest in some apartments developed by Chinese developers." A Shanghai tourist staying in a hotel run by a Chinese developer said. "Property prices on Jeju Island are much cheaper than on the mainland, and having a Korean residency visa would be nice too."
To cope with the growing number of tourists and residents, the Jeju government plans to build a second airport on the east coast, south of Seongsan Ilchulbong (Sunrise Peak) to ease the existing traffic pressure at the South Coast Airport. The Ministry of Transport said the number of passengers at Jeju Island International Airport increased from 11.3 million in 2005 to 2.5 million last year, 3.2 million passengers.
The Ministry of Transport plans to begin construction as early as 2018, with the goal of opening the new airport in 2025, by which time it expects to have 40 million passengers.
But not everyone is welcoming the influx of Chinese capital and new jobs, especially those concerned about rising property prices and the island's Indigenous inhabitants whose pristine natural environment has been destroyed. The lava caves throughout the island and the Seongsan Ilchulbong (Sunrise Peak), famous for its sunrise, are listed as a UNESCO World Heritage Site.
Jeju Island, South Korea - Trends in housing prices and key areas of land price growth
Overseas - Chinese property in South Korea's Jeju Island, landholdings increased sevenfold in five years
（According to YONHAP NEWS）
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