Seoul’s Gangnam Home Prices Show Signs of Rebound as Lease Crunch Grows, Tax Overhaul Looms

Seoul home prices in the Gangnam area, which had been sliding, are showing signs of a rebound as bargain listings dry up and rising jeonse (lump-sum lease) prices push buyers back into the market. The shift has been led by Songpa-gu, where a string of record-high deals in smaller units and outlying neighborhoods has helped halt a decline that had lasted nearly two months.
 
According to the Korea Real Estate Board, Seoul’s average apartment sale price rose 0.15% from a week earlier in the third week of April (as of the 20th). Songpa-gu, which had fallen for eight straight weeks along with Gangnam and Seocho, switched to gains for the first time in nine weeks, ending a downturn that began in February as listings from multi-home owners hit the market.
 
The Ministry of Land, Infrastructure and Transport’s transaction disclosure system shows a 27-square-meter unit at Ricenz in Jamsil-dong sold on April 4 for 1.83 billion won, topping 100 million won per 3.3 square meters. A 49-square-meter unit at Helio City in Garak-dong also set a new record at 2.17 billion won. As major complexes such as Jamsil’s Els saw 84-square-meter units recover to around 3.4 billion won, demand shifted toward smaller, more affordable units and outer areas.
 
Buyer sentiment has also rebounded. The sales supply-demand index for Seoul’s southeastern region, which includes the three Gangnam districts, came in at 100.1 this week. It was the first time since mid-February — nine weeks — that the index rose above the 100 baseline, indicating more buyers than sellers.
 
Rising jeonse prices across Seoul are also supporting sale prices. The Korea Real Estate Board said Songpa-gu’s weekly apartment jeonse price change was 0.39%, tied with Seongbuk-gu for the highest in the city. With jeonse listings drying up at large complexes, more tenants are shifting toward purchases.
 
Seoul’s apartment jeonse prices have widened their gains for four straight months this year. The city’s cumulative jeonse increase stands at 2.17%, more than five times the 0.4% rise over the same period a year earlier. Four districts have already posted cumulative increases above 3%: Gwangjin (3.23%), Seongbuk (3.56%), Nowon (3.47%) and Seocho (3.22%).
 
Experts warn that if the lease crunch persists, would-be first-time buyers could be pushed into “forced buying,” adding fuel to price increases.
 
Nam Hyuk-woo of Woori Bank’s real estate research center said improved sentiment is being reflected in prices, but added that policy uncertainty remains. “With policy variables still in play, such as the possibility of reducing long-term holding deductions, a box-range market could continue as sellers and buyers watch each other,” he said.
   
With signs of a market rebound, analysts expect the government to move faster. After President Lee Jae-myung called for an overhaul of real estate taxation to stabilize housing prices, a July tax law revision package is expected to include wide-ranging measures spanning capital gains tax and holding taxes, including the comprehensive real estate holding tax and property tax.

A leading option is to scale back the long-term holding deduction for non-resident single-home owners. Under current rules, deductions can reach up to 80%. The plan would restructure the benefit around actual occupancy periods, sharply increasing taxes on a “one home for investment” that is not owner-occupied. The article said the approach reflects the president’s view that “cutting taxes just for holding encourages speculation.”
 
Measures to increase the effective burden of holding taxes are also under review. The government is considering raising the fair market value ratio — which can be changed by enforcement decree — from the current 60% to 80% to 100% in stages.
 
Still, criticism of a regulation-heavy approach is growing. An industry expert who requested anonymity said many multi-home owners have already adjusted to policy changes, and tougher taxes could instead deepen a “lock-up” in listings. The expert said it would be more important to present a concrete roadmap for urban housing supply than to rely on tax measures after the fact.