As the housing market in Seoul contracts following the August 3 tax reforms, demand is shifting towards relatively lower-priced areas. Buyers who have abandoned purchases in high-priced regions are moving to neighborhoods like Nowon, Gangbuk, and Dobong, raising concerns about a potential balloon effect. If landlords, mindful of tax burdens, choose to sell their rental properties or occupy them, existing tenants may be pushed back into the rental market, creating additional pressures.
On November 2, Ajou Economics analyzed data from the real estate big data platform Asil and the Ministry of Land, Infrastructure and Transport. The analysis revealed that in the past three months, apartment listings increased in 24 out of 25 districts in Seoul. The total number of listings rose from 100,105 to 116,882, marking a 16.8% increase, with only Seocho District seeing a 2.4% decrease.
Despite the increase in listings, transactions have not kept pace. Listings in Mapo, Dongjak, Nowon, and Yangcheon rose by a combined 28.0% compared to three months ago, yet September's transaction volume fell by 24.8% from August. Dongjak saw a drop from 124 transactions to 81, a decrease of 34.7%, while Mapo (-25.7%), Nowon (-22.9%), and Yangcheon (-22.4%) also experienced declines.
However, the trend following the decrease in transactions varied by region. In areas like Mapo, Dongjak, and Yangcheon, sellers are not lowering their asking prices, while buyers are waiting for further adjustments, leading to a stagnation in transactions. Yuseon Jong, a professor at Konkuk University, noted, "Homeowners listing their properties may be looking to upgrade to another home. They are reluctant to lower their asking prices because they need to sell their current home at a desired price to purchase the next one."
Conversely, signs of demand migration are evident in relatively affordable outer districts. Although Nowon saw a 22.9% decrease in transaction volume, the proportion of high-price transactions increased from 31.7% to 37.2%. Gangbuk experienced a 4.1% increase in transactions in September compared to the previous month, while Dobong's decline was limited to 0.5%, performing better than other regions.
Kim Hyoseon, a senior real estate expert at KB Kookmin Bank, stated, "Currently, the higher the housing price, the lower the amount available for loans. As genuine buyers turn to relatively cheaper areas in Seoul's outskirts or Gyeonggi Province, a balloon effect is emerging."
Another secondary burden lies in the rental market. If landlords, aiming to reduce future tax burdens, decide to sell properties with tenants or move in themselves, existing renters will need to find new rental homes. This scenario creates a situation where one rental unit is removed from the market while new demand arises, potentially exacerbating the shortage of rental listings and increasing price pressures.
Particularly, if buyers who have abandoned purchases remain in the rental market, the burden could intensify. Demand capable of purchasing homes is shifting to the relatively cheaper outer market, while those unable to buy are moving into the rental market, indicating that the policy's secondary effects could manifest in both the sales and rental sectors simultaneously.
Kim added, "The rise in rental prices is also impacting the sales market," emphasizing the interconnectedness of the sales and rental markets. Professor Yoo also remarked, "The burden of comprehensive real estate taxes varies by district based on housing prices and ownership status, which could lead to different market reactions across districts."
* This article has been translated by AI.
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