Chinese investors are snapping up expensive apartments in Busan's upscale Haeundae district as well as Gangnam, Yongsan and Seongsu in Seoul.

The number of foreigners who buy apartments in Korea has surged and Chinese make up by far the biggest group. Some of them show up at realtor's offices with suitcases full of cash, and there are fears that their willingness to splurge could distort market prices.

There appears to have been some kind of viral spur to buying Korean real estate in China. On China's question-and-answer website Zihu, many comments recommend buying apartments in Korea as an ideal investment. They cite the low risk of price falls and ease of management due to proximity.

Amid the current uncontrollable price spiral, some Chinese investors have made a lot of money buying apartments and reselling them.

Korea has seen a 16-fold surge in apartment purchases by Chinese investors over the past decade. According to Supreme Court registry data, the number of high-rise and low-rise apartments and studios sold to Chinese increased from 648 in 2011 to 10,559 last year. Over the same period, the number of residential property being registered in foreigners’ names surged sixfold from 3,238 to 19,371.

But overall the Chinese only account for 0.6 percent of all homebuyers here.

If Chinese investors are flush with cash, they can buy apartments outright, whereas Koreans usually pay a deposit and installments. One estate agent in Gangnam said, "When they see a place with a nice view, they show up with cash and pay the whole price upfront." Another real estate agent said, "They know exactly where the most desirable apartments are and pay upfront without haggling."

The government is desperately trying to crack down on real estate speculation here, but the loan restrictions it has put in place do not bother cash-rich foreigners or those who can get a loan from a bank at home.

Foreigners can also duck punitive taxes on owners of multiple homes. If a Chinese couple buy two apartments in Korea, one in each of their names, they are not classified as one household with two homes and therefore spared the heavier tax burden.

One analyst at a commercial bank said, "If speculative real-estate purchases by Chinese continue, the government should consider taking steps."