As the government moves to increase real estate taxes, urgent sales of high-priced apartments in Seoul's Gangnam area have surged, leading to a decline in the transaction index for the first time in four months. In contrast, the northeast region, which includes Nowon, Dobong, and Gangbuk, continues to see price increases, resulting in mixed trends across different areas.
According to the Korea Real Estate Agency's statistics on apartment transaction indices released on October 16, the transaction index for apartments in the southeast region of Seoul (Gangnam, Seocho, Songpa, and Gangdong) fell by 0.29% in August compared to the previous month. This decline marks the only decrease among the five regions in Seoul.
The southeast region's transaction index had previously dropped by 2.62% and 1.32% in March and April, respectively, ahead of the implementation of increased capital gains taxes on multiple homeowners on May 9. Although the index rose from May onward, it turned downward again in August.
Market analysts believe that the government's tax reform plan has impacted the decline in Gangnam property prices. The tax reform plan, announced on August 3, included increases in comprehensive real estate taxes for high-priced homes and reductions in long-term capital gains tax exemptions, prompting concerns about tax burdens and an increase in urgent sales.
For instance, a 76.79 square meter apartment in Eunma, Daechi-dong, Gangnam, was sold for between 3.25 billion and 3.45 billion won in August. This is significantly lower than the 3.7 billion to 3.8 billion won range it fetched in November of the previous year. In September, the reported transaction price dropped to around 3.1 billion won.
The Korea Real Estate Agency's weekly apartment price trends also indicate that Gangnam and Seocho districts have recorded a continuous decline for ten weeks since the survey on August 10.
Conversely, the overall apartment transaction index in Seoul rose by 0.72% in August. Although this is a decrease of 1.11 percentage points from the previous month's increase of 1.83%, the upward trend remains intact.
Notably, the northeast region, which includes Nowon, Dobong, and Gangbuk, saw a rise of 1.54%, the highest increase among the five regions in Seoul. The downtown area, including Jongno and Jung-gu, also rose by 1.06%. Unlike the high-priced Gangnam area, regions with relatively lower price burdens continue to experience upward trends.
However, there are concerns that the upward trend in Seoul apartment prices may gradually slow down. This is attributed to a recent decrease in transaction volumes and increasing financial burdens due to rising loan interest rates.
The Korea Real Estate Agency's preliminary data for September indicates an expected increase of 0.16% in the apartment transaction index, lower than August's 0.72%. In particular, the southeast region is projected to decline by 1.71%, widening its drop, while the downtown area is also expected to fall by 0.97%, potentially turning negative.
Meanwhile, according to the Korea Real Estate Agency's report on weekly apartment price trends for the second week of October (as of October 12), the average rent for apartments in Seoul rose by 0.18% compared to the previous week, continuing its upward trend. Notably, rent increases were prominent in Seongbuk-gu (0.39%), Nowon-gu (0.38%), Jungnang-gu (0.37%), and Mapo-gu (0.27%).
* This article has been translated by AI.
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