Seoul Apartment Transactions Surge 70% as Tax Deadline Looms

Seoul's real estate market is showing signs of increased activity, with apartment transaction permit applications jumping by nearly 70% in March compared to the previous month. This surge marks the highest volume since the entire city was designated a land transaction permit zone last October, indicating a potential shift in market dynamics.

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The number of apartment transaction permit applications received by each district in March was 7,653, a 69.7% increase from the previous month (4,509).

The data, released by the Seoul Metropolitan Government, reveals that multi-homeowners were a driving force behind this increase. Their applications constituted 17.1% of the total, with higher proportions observed in key areas like the Han River Belt (25.0%) and the affluent Gangnam 3 districts plus Yongsan (21.6%). This suggests that property owners with multiple homes are actively seeking to offload their assets.

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Of these, 1,310 applications (17.1%) were from multi-homeowners.

Analysts attribute this trend primarily to the impending deadline for the suspension of increased capital gains taxes on multi-homeowners, which is set for May 9th. With this date looming, many property owners appear to be rushing to sell their properties to avoid the steeper tax burden, leading to a rise in both the number of applications and the available listings, especially in high-value areas.

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The city analyzes that the increase in transaction permit applications is centered around properties from multi-homeowners ahead of the expiration of the suspension of the capital gains tax hike for multi-homeowners on May 9.

While the overall transaction volume has increased, the average price of permitted transactions saw a slight decrease of 0.08%. This dip is particularly noticeable in areas with a high concentration of expensive apartments, such as Gangnam, Seocho, Songpa, and Yongsan, where prices fell by 1.73%. This price softening is likely a consequence of the increased supply from multi-homeowners eager to sell and potentially lower offers from buyers anticipating further price drops. The situation highlights the complex interplay between government regulations, tax policies, and market behavior in Seoul's dynamic housing sector.

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In areas with many high-priced apartments, such as Gangnam 3 districts and Yongsan, the price decline continued due to an increase in sale listings resulting from strengthened regulations on multi-homeowners and transactions of urgent sale properties.